Who pays unemployment insurance tax - confused about NYS Department of Labor deductions
I just started a new job in retail and noticed something called 'NYS UI' being deducted from my paycheck. My manager said it's unemployment insurance tax but I'm confused - I thought only employers paid into unemployment? Is NYS Department of Labor taking money from my check for unemployment benefits? This is my first job so I have no idea how this works. The deduction is only like $3 but I want to understand what I'm paying for.
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Danielle Mays
In New York, both employers AND employees pay unemployment insurance tax. Your employer pays the larger share to NYS Department of Labor (varies by their experience rating), but employees also contribute a small percentage of their wages up to a certain wage cap. It's been this way for years - the employee portion helps fund the unemployment insurance program that you'd be eligible for if you lost your job.
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Derek Olson
•Oh okay that makes sense! So if I ever need to file for unemployment with NYS Department of Labor, I've already been paying into the system?
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Roger Romero
yeah its normal dont worry about it. every job ive had takes out the UI tax
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Anna Kerber
The employee contribution rate changes periodically but it's usually around 0.5% of your wages up to the taxable wage base (which is over $11,000 for 2025). Your employer pays much more - their rate can be anywhere from under 1% to over 7% depending on how many former employees have filed unemployment claims. It's basically insurance - you pay a little now so benefits are available if you need them later.
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Niko Ramsey
•I never knew employers paid different rates! That explains why some companies seem so paranoid about people filing unemployment claims with NYS Department of Labor.
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Anna Kerber
•Exactly! Companies with higher turnover or more UI claims pay higher rates. It incentivizes employers to retain workers and only terminate for valid reasons.
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Seraphina Delan
Wait I'm confused too - if we're already paying into unemployment insurance through payroll deductions, why do some people have trouble getting approved for benefits? Shouldn't it be automatic if we've been paying in?
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Danielle Mays
•Paying the tax doesn't guarantee approval - you still have to meet eligibility requirements like being unemployed through no fault of your own, actively seeking work, and having sufficient work history. The tax just funds the program, but NYS Department of Labor still has to verify you qualify for benefits under the rules.
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Jabari-Jo
If you ever need to contact NYS Department of Labor about unemployment benefits, I'd recommend checking out claimyr.com - they help people get through to actual agents instead of dealing with the busy phone lines. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I used it when I had questions about my claim status and it saved me hours of trying to call.
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Derek Olson
•Good to know for the future! Hopefully I won't need unemployment anytime soon but it's helpful to know there are ways to actually reach someone at NYS Department of Labor if needed.
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