Do employees pay unemployment taxes - confused about Washington ESD deductions

Oh that makes sense! So the money for unemployment benefits comes entirely from what employers pay to Washington ESD?

Exactly right. Employers pay quarterly unemployment taxes to Washington ESD based on their payroll and experience rating.

Wait really? I could have swore I was paying unemployment taxes at my last job here in Seattle.

nope, maybe you're thinking of state disability insurance or something else? unemployment is employer-only in WA

That's really helpful to know. Do you know roughly how much employers have to pay?

It varies based on the employer's experience rating and industry, but it typically ranges from about 0.19% to 6.02% of wages up to the wage base limit. New employers usually start around 2.7%.

Wow that seems like a lot for employers to pay. No wonder some companies are so strict about documenting reasons for termination.

Thanks for the tip! I don't need to contact ESD right now but good to know for the future.

I've heard about services like that but never tried one. Did they actually get you through to a real person?

Yeah, within like 20 minutes instead of the hours I was spending trying to call myself. Totally worth it when you actually need to talk to someone at ESD.

That's interesting. So Washington unemployment benefits are pretty good compared to other places?

Yes, Washington typically ranks in the top 10 states for unemployment benefit generosity. Maximum weekly benefit is currently $844 plus a $25 dependency allowance if you have dependents.

You might be thinking of State Disability Insurance (SDI) deductions, but Washington doesn't have that either. Or maybe FICA taxes? Those definitely come out of your paycheck.

Maybe that was it. This is all so confusing with different taxes and deductions.

The main payroll taxes employees pay in Washington are: federal income tax, Social Security (6.2%), Medicare (1.45%), and state income tax... oh wait, Washington doesn't have state income tax either! So really just the federal ones.

Yeah that's one of the reasons I was excited to move here for work. The tax situation seems much better.

Don't forget we still have sales tax and property taxes though, so the state gets their money somewhere!

Great question! Eligibility is based on your work history and wages earned, not on whether you personally paid unemployment taxes. As long as your employer was paying their unemployment taxes (which they're required to), you're covered.

That makes sense. So it's more about whether you worked enough hours and earned enough wages?

Exactly. In Washington you generally need to have earned wages in at least two quarters of your base year, and meet the minimum wage requirements. The fact that employers fund the system doesn't change employee eligibility rules.

Pennsylvania is one of the few states that does have employee unemployment contributions - I think it's like 0.06% of wages up to a certain limit. Much different system than Washington.

Yeah it wasn't much but it was definitely there on my paystub. Washington's approach seems much simpler.

That's a good point. I think some people do feel guilty about collecting unemployment even when they really need it.

Exactly. It's insurance that your employer paid for on your behalf. No different than using health insurance when you get sick.

Good to know! Hopefully I won't need unemployment benefits but if I do, I'll remember that resource.

I've been trying to get through to ESD for days about my claim. Definitely going to look into this Claimyr thing.

That's a smart way to structure it. Gives employers an incentive to avoid unnecessary layoffs.

Right, and new employers start at a standard rate until they build up enough history for ESD to calculate their individual experience rating.

No, your benefits are protected. The unemployment insurance fund is maintained by ESD and funded by all employers collectively. One employer going out of business doesn't affect the overall system.

oh ok good that was worrying me because my company has been struggling lately

Definitely! It would be nice if employers explained the unemployment system when you start a job, not just the health insurance and 401k stuff.

Yeah or at least have it clearly explained on the state's website. Though to be fair, ESD's website has gotten a lot better in recent years.

Interesting point. I hadn't thought about how it might influence employment practices.

That's true, but the flip side is that companies with good records get lower rates, so there's still an incentive to be a good employer.

Same here! Really appreciate everyone taking the time to explain everything.

This is why I love this forum - people actually help each other out with real information instead of just complaining.

Good point to mention. So you could end up owing money to ESD under certain circumstances, just not through regular payroll deductions.

Exactly. And if that ever happens to anyone, definitely appeal the overpayment decision if you think it's wrong. ESD makes mistakes sometimes.

Seems like several people have had good experiences with that service. I'll bookmark it just in case.

Thanks for sharing that resource. Always good to know options for when you need to reach government agencies.

Perfect summary! This thread answered my question completely and taught me a lot more about how the unemployment system works in Washington.

Great explanation. This should be pinned somewhere for future reference!