Washington ESD employer unemployment tax rates - how much are we paying?

The Washington ESD unemployment tax rate for employers varies based on your experience rating. New employers typically start at around 2.7% for the first few years. Established employers can range from 0.17% to 6.17% depending on their claims history. The rate is applied to the first $68,500 of each employee's wages for 2025.

Thanks! So if I have 10 employees each making $50k, I'd be paying the rate on all their wages since they're under the $68,500 cap?

Exactly right. For your situation with 10 employees at $50k each, you'd pay your assigned rate on the full $500k total wages.

Your experience rating is basically how much your former employees have claimed in unemployment benefits. If you have low turnover and few claims, your rate stays low. High turnover or lots of claims and your rate goes up. Washington ESD reviews this annually.

What happens if you lay people off? Does that automatically raise your rate?

Not automatically, but if those laid-off employees file for unemployment and get benefits, it does affect your experience rating for future years.

I've been struggling to get through to Washington ESD about my employer account questions. Their phone lines are constantly busy and I've been on hold for hours multiple times. Anyone found a better way to reach them?

I had the same problem until I found Claimyr. It's a service that helps you get through to Washington ESD agents. Check out claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Made my life so much easier.

Interesting, I'll check that out. Getting through to Washington ESD has been such a nightmare.

The wage base increases most years with inflation. It was $62,500 in 2023, $64,000 in 2024, and now $68,500 in 2025. So your total tax burden keeps going up even if your rate stays the same.

Ugh, that's frustrating. So even with good experience ratings, we're still paying more each year.

Welcome to running a business in Washington state. Every year brings new costs.

Don't forget there's also the Workforce Education Investment Account (WEIA) surcharge on top of the regular unemployment tax. That's an additional 0.26% on wages over $80,000 per employee.

Wait, so there are actually two different unemployment-related taxes?

Yes, the regular Washington ESD unemployment tax applies to wages up to $68,500, and WEIA is 0.26% on wages over $80,000. They're separate but both related to employment.

I just got my 2025 rate notice and it went up from 1.8% to 2.3%. Had to let some people go during the slow season last year and apparently that hurt my experience rating. Really wish I understood this system better before making those decisions.

That's tough. The experience rating system can be brutal for seasonal businesses.

Have you considered keeping people on reduced hours instead of layoffs? Might be better for your rate long-term.

For anyone wanting to understand their specific rate, you can log into your Washington ESD employer account and look at your quarterly reports. They break down exactly how your experience rating is calculated.

I tried that but the website is confusing. Where exactly do you find the experience rating calculation?

It's under the 'Reports' section, then 'Experience Rating Statement'. Shows your benefit ratio and how it translates to your tax rate.

The minimum rate is 0.17% and maximum is 6.17% for 2025. Most established businesses with good records pay somewhere between 0.5% and 2.5%. New businesses get the standard 2.7% rate for their first three years.

Is there any way to get a lower rate as a new business if you have experience in the industry?

Not really. The 2.7% new employer rate is pretty standard regardless of your background. You have to build your own experience rating over time.

Construction companies often get hit hard with unemployment taxes because of the seasonal nature of the work. I've seen rates as high as 5-6% for contractors with high turnover.

That's brutal. At 6% on $68,500 per employee, that's over $4,000 per worker per year.

This is why I try to keep my crew year-round even during slow periods. The unemployment tax savings help offset the labor costs.

I had questions about how temporary workers affect your experience rating and couldn't get answers from Washington ESD for weeks. Finally used that Claimyr service someone mentioned earlier and got through to an agent the same day. Turns out temp workers can still impact your rating if they file claims after their assignment ends.

Good to know about temp workers. I use a lot of seasonal help and wasn't sure how that worked.

Yeah, Claimyr has been a game-changer for getting Washington ESD questions answered quickly. Worth checking out if you're struggling with their phone system.

The quarterly filing deadlines are also important to remember. Late payments can result in penalties and interest charges on top of your regular unemployment tax.

What's the penalty for late filing? I missed the deadline once by a few days.

It varies but can be 5-10% of the tax owed plus interest. Better to file on time even if you have to estimate and adjust later.

Anyone know if there are any proposed changes to the unemployment tax rates for 2026? I'm working on long-term budget projections.

I haven't seen anything official yet, but the wage base usually increases with inflation each year. Rates themselves depend on the trust fund balance.

The Legislature sometimes makes changes but they usually announce those in the spring. Keep an eye on Washington ESD's website for updates.

Pro tip: Keep detailed records of all separations and the reasons. If an employee quits voluntarily or is terminated for misconduct, their claim might be denied and won't affect your experience rating.

How do you document misconduct properly? I've had employees terminated for attendance issues but they still got benefits.

You need written policies, documentation of violations, and progressive discipline records. Washington ESD requires substantial proof for misconduct disqualifications.

The whole system seems designed to penalize small businesses. Between the base rate, experience rating increases, and the WEIA surcharge, it adds up fast.

It's definitely one of the higher costs of doing business in Washington. Have to factor it into your pricing structure.

At least it's predictable once you understand your rate. Better than some other business taxes that change randomly.

I've found that investing in employee retention is worth it just for the unemployment tax savings alone. Lower turnover means lower experience rating and lower taxes.

What retention strategies have worked best for you?

Better benefits, regular pay increases, and clear advancement paths. The upfront cost is usually less than the unemployment tax increases from high turnover.

For anyone still having trouble reaching Washington ESD about their employer account, I had great success with Claimyr recently. They got me through to someone who could explain my experience rating calculation and help me understand why my rate increased. Saved me hours of trying to call on my own.

How does that service work exactly? Do they just call for you?

They have a system that helps you get through to actual agents instead of sitting on hold forever. Check out their demo video to see how it works.

The bottom line is that Washington ESD unemployment taxes are just part of the cost of having employees. Budget for 1-3% of your total payroll as a rough estimate, but check your actual rate annually.

That's a good rule of thumb. Better to overestimate than get caught short when rates go up.

Thanks everyone for all the detailed info. This has been really helpful for understanding what I'm looking at cost-wise.