How to calculate unemployment tax rate in Washington ESD system?
I'm trying to figure out how the unemployment tax calculation works for my small business in Washington state. I got my quarterly notice from Washington ESD and the rate seems higher than last year. Can anyone explain how they determine the unemployment tax rate? I have 8 employees and we've been operating for about 3 years now. The paperwork mentions something about experience rating but I don't understand what that means for my actual tax calculation.
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Jabari-Jo
Washington ESD uses your company's experience rating to calculate your unemployment tax rate. It's based on how many former employees have filed claims against your account over the past few years. New businesses start at a standard rate around 2.7% but it can go up or down based on your claim history.
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Seraphina Delan
•So if none of my employees have filed unemployment claims, my rate should be lower than 2.7%?
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Jabari-Jo
•Not necessarily. It takes time for the experience rating to kick in. For the first few years you're usually at the standard new employer rate regardless of claims.
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Kristin Frank
ugh the whole system is confusing. i've been trying to get someone at washington esd to explain my rate calculation for weeks but can never get through on the phone
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Micah Trail
•I had the same problem until I found Claimyr. It's a service that helps you get through to Washington ESD agents without waiting on hold forever. Check out claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ that shows exactly how it works.
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Kristin Frank
•interesting, never heard of that before. does it actually work?
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Micah Trail
•Yeah it worked great for me. I needed to resolve a quarterly report issue and couldn't get through the normal way. They got me connected to an agent within a few hours.
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Nia Watson
The unemployment tax rate in Washington has several components. You pay on wages up to the wage base which is $68,500 for 2025. Your actual rate depends on your experience rating factor, which Washington ESD calculates using a formula that looks at benefit charges against your account versus total taxable wages over a specific period.
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Seraphina Delan
•What's the wage base? Does that mean I only pay unemployment tax on the first $68,500 each employee earns?
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Nia Watson
•Exactly. So if you have an employee making $80,000, you only pay unemployment tax on $68,500 of their wages. The wage base amount changes each year.
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Alberto Souchard
•I thought it was lower than that. Are you sure about the $68,500 figure?
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Nia Watson
•Yes, Washington ESD publishes the wage base annually. It was $62,500 in 2024 and increased to $68,500 for 2025.
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Katherine Shultz
My accountant handles all this stuff but from what I understand your rate can range from like 0.3% to over 6% depending on how many claims you've had. The more people who collect unemployment after leaving your company, the higher your rate goes.
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Seraphina Delan
•That seems like it could really add up if you have high turnover.
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Marcus Marsh
•Tell me about it. I run a restaurant and lost half my staff during covid. My rate jumped from 2.7% to 4.8% the following year because of all the claims.
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Katherine Shultz
•Ouch. Did you try appealing it or anything?
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Jabari-Jo
There's also a social cost factor that gets added to everyone's rate to cover the administrative costs of running the unemployment system. Plus there's a solvency surcharge that can be applied when the unemployment trust fund balance gets too low.
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Hailey O'Leary
•Wait so even if I have zero claims I still pay extra fees?
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Jabari-Jo
•Right, the social cost factor is applied to all employers regardless of their individual experience rating. It helps fund the overall system operations.
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Cedric Chung
I've been paying unemployment taxes for 15 years and still don't fully understand the calculation. Every time I call Washington ESD I get a different explanation. The quarterly statements they send are confusing too.
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Talia Klein
•Same here! I tried calling last month about a discrepancy in my rate and spent 3 hours on hold before getting disconnected. So frustrating.
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Maxwell St. Laurent
•You should try Claimyr if you need to actually talk to someone at Washington ESD. I used them when I had questions about my experience rating and they got me through to an agent who could pull up my account and explain everything clearly.
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Cedric Chung
•How does that work exactly?
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Maxwell St. Laurent
•You just go to claimyr.com and they handle getting you connected to the right department. Way better than trying to navigate the phone system yourself.
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PaulineW
If you're a new employer the rate is usually 2.7% for the first year or two until you have enough payroll history for them to calculate your individual experience rating. The formula they use is pretty complex - it looks at benefit charges, taxable wages, and some other factors over a multi-year period.
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Seraphina Delan
•How do I know when my experience rating kicks in? Do they notify you?
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PaulineW
•It should show up on your quarterly rate notice. There's usually a line that indicates whether you're at the standard new employer rate or if you have an assigned experience rating.
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Annabel Kimball
•Mine just says 'rate assigned' but doesn't explain how they calculated it. Very helpful lol
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Chris Elmeda
The easiest way to understand your specific rate is to look at your quarterly rate determination notice from Washington ESD. It should break down the different components - your base rate, social cost factor, any surcharges, etc. If the math doesn't make sense you can request a detailed explanation.
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Seraphina Delan
•Where exactly on the notice does it show the breakdown? I'm looking at mine now and just see the final rate.
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Chris Elmeda
•It should be on the second page under 'Rate Components' or something similar. If you don't see it, your notice might be the simplified version.
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Jean Claude
•I never get a detailed breakdown either. Just the total rate and amount due.
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Charity Cohan
One thing that caught me off guard was that voluntary quits don't usually affect your experience rating, but layoffs and terminations do. So if someone quits to take another job, that won't raise your rate even if they file for unemployment later.
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Josef Tearle
•Wait really? I thought any unemployment claim would count against you.
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Charity Cohan
•Nope, it depends on the reason for separation. If Washington ESD determines the employee quit without good cause, those benefits usually aren't charged to your account.
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Shelby Bauman
•That's good to know. I had an employee quit last month and was worried about it affecting my rate.
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Quinn Herbert
The rate calculation also depends on your industry classification. Different industries have different base rates because some have historically higher unemployment claim rates than others. Construction and seasonal businesses usually pay higher rates.
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Seraphina Delan
•How do I find out what industry classification Washington ESD has me under?
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Quinn Herbert
•It should be on your quarterly reports, usually listed as a NAICS code. If you think it's wrong you can request a reclassification.
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Salim Nasir
•I'm in retail and my rate seems higher than what other retail owners are paying. Might be worth checking my classification.
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Hazel Garcia
Don't forget that you can also get credits for hiring certain types of workers through various programs. There are work opportunity tax credits and other incentives that can offset some of your unemployment tax liability.
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Laila Fury
•I've never heard of getting credits for unemployment taxes. Can you explain more?
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Hazel Garcia
•There are federal programs like WOTC that provide tax credits for hiring from certain groups. It doesn't directly reduce your unemployment tax but helps offset the overall payroll tax burden.
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Geoff Richards
If you have questions about your specific rate calculation, you really need to talk to someone at Washington ESD directly. The online account system doesn't give you enough detail to understand how they calculated everything.
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Simon White
•Good luck getting through to anyone though. I've been trying for weeks.
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Hugo Kass
•Try Claimyr - they specialize in helping people get through to Washington ESD. I used them when I needed to discuss a rate appeal and it saved me hours of frustration trying to get through on my own.
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Simon White
•Is that expensive?
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Hugo Kass
•It's worth it when you need actual answers. They focus on getting you connected efficiently rather than you spending all day on hold.
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Yuki Yamamoto
As a new business owner myself, I found that Washington ESD's rate calculation becomes clearer once you understand the basic components. Your rate starts with a base percentage determined by your industry classification, then gets adjusted by your experience rating (which considers unemployment claims filed by your former employees), plus additional factors like the social cost component and any solvency surcharges. Since you've been operating for 3 years, you're likely transitioning from the standard new employer rate to your individualized experience rating. The key is that fewer claims against your account generally mean a lower rate over time.
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Grace Johnson
•This is really helpful! I'm also a new business owner and had no idea about the industry classification affecting the base rate. Do you know if there's a way to see all the different industry rates, or do you have to call Washington ESD to find out what other classifications might apply to your business?
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