How much does an employer have to pay for unemployment in Washington state?
I'm starting a small business in Washington and trying to understand the unemployment insurance costs. I know employers pay into the Washington ESD system but I can't find clear info on the actual rates. Does anyone know what percentage of payroll goes to unemployment insurance? Is it based on company size or claim history? Also wondering if there are different rates for new businesses vs established ones.
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Lucas Parker
Washington ESD sets unemployment insurance tax rates annually. For 2025, most employers pay between 0.19% and 5.4% of each employee's wages up to the wage base. New employers typically start at around 2.7% unless they qualify for a lower rate based on industry classification.
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Katherine Hunter
•Thanks! Is that 2.7% on the first $68,500 of wages per employee? That's what I'm seeing as the 2025 wage base.
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Lucas Parker
•Exactly right. So if you have an employee making $50,000, you'd pay unemployment tax on the full $50,000. If they make $80,000, you only pay on the first $68,500.
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Donna Cline
The rate depends on your experience rating too. Companies with lots of former employees filing claims pay higher rates. If you keep employees long-term and rarely have claims, your rate goes down over time.
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Harper Collins
•How long does it take to build up that experience rating? I'm also starting a business and wondering when rates might drop.
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Donna Cline
•Usually takes 3-4 years to establish a solid experience rating. Washington ESD looks at claims filed against your account versus total wages paid.
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Kelsey Hawkins
I've been dealing with Washington ESD for years as an employer and honestly their communication about rate changes is terrible. You get a notice once a year with your new rate but trying to understand WHY it changed is nearly impossible. I spent hours on hold trying to get someone to explain my rate increase last year.
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Dylan Fisher
•Same experience here! The automated system just gives you basic info but doesn't explain the calculation. Have you tried that Claimyr service? I heard they can help you actually reach someone at Washington ESD who can explain the details.
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Kelsey Hawkins
•Never heard of that but I'll check it out. Getting through to a real person at Washington ESD is like winning the lottery.
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Dylan Fisher
•Yeah it's claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Saved me tons of time when I needed to dispute a claim that was filed incorrectly.
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Edwards Hugo
Don't forget about the Employment Security Department administrative fund surcharge too. That's an extra 0.02% on top of your regular rate. Small amount but it adds up.
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Katherine Hunter
•Wait, there's an additional surcharge? So if my rate is 2.7%, I'm actually paying 2.72%?
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Edwards Hugo
•Correct. The surcharge helps fund Washington ESD operations. It's been around for years but a lot of new employers don't know about it.
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Gianna Scott
As someone who's paid into this system for 15 years, I can tell you it's basically legalized theft. The rates keep going up but the benefits stay the same. And don't even get me started on fraudulent claims during COVID that employers are still paying for through higher rates.
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Harper Collins
•I get the frustration but unemployment insurance is important for workers who lose their jobs through no fault of their own.
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Gianna Scott
•Sure, but the system is broken when honest employers subsidize fraud and abuse. Washington ESD approved claims without proper verification for years.
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Alfredo Lugo
•The fraud was definitely a problem but that's more reason to make sure the system works properly, not eliminate it entirely.
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Sydney Torres
For new businesses, you might qualify for the new employer rate in your industry class rather than the standard 2.7%. Construction and seasonal industries often have different starting rates.
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Katherine Hunter
•I'm in tech/software development. Would that be considered a lower risk industry?
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Sydney Torres
•Generally yes. Tech companies tend to have lower turnover and fewer layoffs compared to construction or retail. Your initial rate might be closer to 1.5-2.0%.
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Kaitlyn Jenkins
whatever you do dont try calling washington esd about this stuff. been on hold for 3 hours before and never got through. their website has some info but its confusing as hell
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Caleb Bell
•The phone situation is ridiculous. I actually started using Claimyr after seeing it mentioned here and it's been a game changer for reaching actual people at Washington ESD.
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Kaitlyn Jenkins
•how does that work? do they just call for you or something?
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Caleb Bell
•They handle the calling and waiting, then connect you when they get someone on the line. Way better than sitting on hold all day.
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Danielle Campbell
Also remember that you pay unemployment tax quarterly, not annually. The payments are due by the last day of the month following the end of each quarter. Miss a payment and you'll get hit with penalties and interest.
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Katherine Hunter
•Good point. So Q1 2025 taxes would be due by April 30th?
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Danielle Campbell
•Exactly. And Washington ESD is pretty strict about the deadlines. Set up calendar reminders now because they don't send payment reminders.
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Rhett Bowman
Been running a small business for 8 years and my rate has gone from 2.7% down to 0.8% because we've never had claims filed against us. Takes time but the savings are significant once you build that history.
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Abigail Patel
•That's a huge difference! How many employees do you have?
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Rhett Bowman
•Started with 3, now we're at 12. The key is hiring well and treating employees right so they don't leave. Every claim filed against you raises your future rates.
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Daniel White
If you're doing payroll yourself, make sure you understand the wage base limit. I made the mistake of paying unemployment tax on full salaries for high earners my first year. Cost me thousands in overpayments that took months to get refunded from Washington ESD.
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Katherine Hunter
•How did you get the overpayment refunded? Did you have to call them?
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Daniel White
•Had to file an amended quarterly report and yes, spent forever trying to reach someone. This was before I knew about Claimyr - would have saved me hours of phone tag.
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Nolan Carter
Pro tip: keep detailed records of everything. Washington ESD audits are random but thorough. They'll want to see payroll records, tax payments, and documentation for any claims filed against your account.
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Natalia Stone
•How far back do they typically audit?
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Nolan Carter
•Usually 3-4 years but they can go back further if they find discrepancies. Better to be over-prepared than scrambling for records.
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Tasia Synder
The whole system is designed to confuse small business owners IMO. Between the rate calculations, quarterly filings, and wage base limits, it's like they want you to make mistakes so they can charge penalties.
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Selena Bautista
•I think it's more about complexity than intentional confusion. The system has to handle every type of business and employment situation in the state.
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Tasia Synder
•Maybe, but they could definitely make the instructions clearer. Half the forms reference other forms that reference other forms.
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Mohamed Anderson
Don't forget that independent contractors don't count toward your unemployment tax. Only employees on W-2s. If you're using 1099 contractors, you don't pay unemployment tax on those payments.
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Katherine Hunter
•That's good to know. I'm planning to use a mix of employees and contractors.
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Mohamed Anderson
•Just make sure you classify them correctly. Washington ESD is cracking down on misclassification and the penalties are steep if they reclassify your contractors as employees.
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Ellie Perry
Been dealing with a disputed claim for 6 months now. Former employee filed for unemployment after we terminated them for cause, but Washington ESD approved the claim anyway. Now I'm stuck with higher rates even though they shouldn't have been eligible.
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Landon Morgan
•You can appeal those decisions. Did you submit documentation showing the termination was for misconduct?
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Ellie Perry
•Yes, but the appeal process is a nightmare. Trying to reach someone at Washington ESD who actually understands the case is impossible.
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Teresa Boyd
•Have you tried Claimyr for this kind of thing? I know they help people reach Washington ESD agents who can actually look at specific cases.
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Lourdes Fox
The rates might seem high but remember that unemployment benefits max out at around $999/week in Washington. If you have a high-paid employee file a claim, the benefits could be substantial. The insurance aspect is worth considering.
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Katherine Hunter
•Good point. I hadn't thought about it as insurance for my business too.
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Lourdes Fox
•Exactly. It protects you from having to pay severance or deal with wrongful termination suits in some cases. The peace of mind has value.
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Bruno Simmons
Make sure you register with Washington ESD as soon as you hire your first employee. There are penalties for late registration and you'll be liable for back taxes from the date you should have registered.
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Katherine Hunter
•How do I register? Do I need to do it online or mail in forms?
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Bruno Simmons
•You can do it online through the Washington ESD employer portal. Much faster than mailing forms. You'll get your employer account number right away.
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Megan D'Acosta
Thanks everyone for all this detailed info! This thread has been incredibly helpful. Just to summarize what I've learned: new tech businesses typically start around 1.5-2.7%, there's an additional 0.02% surcharge, taxes are paid quarterly on wages up to $68,500 per employee, and rates can drop significantly over time with good experience ratings. The hardest part seems to be actually reaching Washington ESD when you have questions - definitely going to check out that Claimyr service several people mentioned. Really appreciate this community sharing real-world experiences!
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