Who is exempt from unemployment taxes - confused about my paycheck deductions
I started a new job last month and noticed my paystub doesn't show any NYS Department of Labor unemployment insurance deductions. My coworker mentioned something about certain employees being exempt from unemployment taxes but I'm not sure if that applies to me. I work for a small nonprofit organization with about 15 employees. Should I be worried that my employer isn't taking out the right deductions? I want to make sure I'll be eligible for benefits if I ever need to file a claim with NYS Department of Labor.
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LunarEclipse
In New York, employees don't actually pay unemployment insurance taxes - that's entirely on the employer's side. What you might be seeing is State Disability Insurance (SDI) deductions, which are different. Employers pay unemployment insurance taxes to NYS Department of Labor based on their payroll, but employees don't have UI taxes deducted from their paychecks. Your eligibility for unemployment benefits depends on your employer paying into the system, not on deductions from your pay.
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Connor O'Neill
•Oh wow, I had no idea! So I don't need to worry about not seeing unemployment deductions on my paystub? That's a relief.
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Yara Khalil
wait what?? ive been looking at my paystub for months thinking my employer wasnt paying unemployment taxes because i dont see deductions. this is confusing
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Keisha Brown
•Yeah it's confusing because other states handle it differently. In NY, employers pay unemployment insurance taxes quarterly to NYS Department of Labor - it's calculated as a percentage of each employee's wages up to a certain cap. The rate depends on the employer's experience rating and industry type.
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Paolo Esposito
I had a similar question when I started working for a church. Religious organizations and some other nonprofits can be exempt from paying unemployment insurance taxes, which means their employees might not be eligible for regular unemployment benefits through NYS Department of Labor. You should check with your HR department about whether your nonprofit has elected to participate in the unemployment insurance system.
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Connor O'Neill
•How do I find out if my employer is participating in the system? Is there a way to verify this with NYS Department of Labor directly?
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LunarEclipse
•You can call NYS Department of Labor to verify your employer's status, but honestly good luck getting through on the phone. If you need to reach an actual agent, I used a service called Claimyr recently that helped me get connected. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Way easier than spending hours on hold.
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Amina Toure
The unemployment tax system is such a mess. Employers pay different rates depending on how many former employees filed claims against them. New businesses pay a standard rate until they build up an experience rating. Some employers try to fight legitimate claims just to keep their tax rates low. It's ridiculous that the burden falls entirely on employers when employees are the ones who need the benefits.
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Oliver Weber
•thats why some places try to classify everyone as independent contractors instead of employees
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FireflyDreams
Just to add - government employees, railroad workers, and agricultural workers under certain thresholds have different rules too. The exempt categories are pretty specific and most regular employees at nonprofits are covered as long as the organization participates in the program.
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