Washington ESD federal unemployment tax - who pays what exactly?

So I never paid anything into unemployment insurance as an employee? That seems weird since I'm the one getting benefits now.

Correct - unemployment insurance is entirely employer-funded in Washington state. Your employer paid both federal and state unemployment taxes on your wages, which is why you're eligible for benefits now.

Yep, and if they have a lot of former employees filing for unemployment, their tax rate goes up. It's called experience rating - companies with more claims pay higher rates to Washington ESD.

that makes so much sense now why my old boss was always trying to get people to quit instead of laying them off

How much does something like that cost though? I'm already struggling financially waiting for my claim to get approved.

They focus on getting you connected rather than charging crazy fees. Way better than spending hours redialing Washington ESD and getting nowhere.

I've heard of services like this but wasn't sure if they were legit. Good to know it actually works for Washington ESD calls.

Yeah during COVID the feds paid for all those extra programs like PUA and PEUC, but those are long gone now. Back to regular state unemployment funded by employer taxes.

Exactly. Now it's just regular UI benefits funded by what employers pay to Washington ESD. Much simpler system but also lower benefit amounts.

What's the typical SUTA rate in Washington? I'm starting a small business and trying to budget for all these taxes.

New employers in Washington typically pay around 2.7% on the first $62,500 of each employee's wages for 2025. But it can range from 0.23% to 6.02% depending on your experience rating once you've been in business a few years.

Those rates change every year too based on the unemployment trust fund balance. Washington ESD adjusts them annually.

Yeah it's like insurance for workers. Your employer pays the premiums and you get the benefits if you lose your job through no fault of your own.

Wish more people understood this. Too many folks think unemployment benefits are some kind of welfare when it's actually insurance that was paid for by employers.

Yeah the federal wage base hasn't been updated in forever. Meanwhile Washington's wage base for SUTA goes up to like $62,500 or something for 2025.

Exactly - $62,500 for Washington state unemployment tax versus only $7,000 for federal. Shows you how outdated the federal system is.

Yep, and that's why Washington ESD has to investigate when employers protest claims. Sometimes it's legitimate (like if someone was fired for misconduct) but sometimes employers just don't want their rates to go up.

I had an employer try to claim I was fired for cause when I was clearly laid off due to budget cuts. Had to go through a whole appeals process with Washington ESD to get my benefits.

Yeah the acronyms are confusing. In Washington it's technically called the Employment Security tax rather than unemployment tax, which is why you see Washington ESD instead of Washington Department of Unemployment or whatever.

That makes sense. Employment Security Department sounds more official than Unemployment Department.

Is that the service at claimyr.com? I keep seeing it mentioned in these forums but wasn't sure if it was worth trying.

Yeah that's the one. They have a demo video that shows how it works if you want to check it out first. Saved me hours of redialing Washington ESD.

What happens if a state loses that credit? Do employers have to pay the full 6% federal rate?

Yes, if a state has outstanding federal loans for their unemployment program, employers in that state lose the credit and pay higher federal unemployment taxes until the debt is repaid.

Fortunately Washington has always maintained a pretty healthy unemployment trust fund, so employers here get the full credit.

Correct - unemployment insurance is 100% employer-funded in Washington state. You might see other deductions like Social Security, Medicare, or state disability insurance, but not unemployment.

ok good to know. I was worried I missed something when I was working and would owe money back or something

Makes sense from a policy perspective. Companies that create more unemployment claims should pay more into the system that funds those benefits.

Though sometimes layoffs are unavoidable due to economic conditions. At least there's a system in place to help workers when it happens.

Yeah Washington's benefits are pretty decent compared to some states. The weekly benefit amount here goes up to like $929 per week if you earned enough in your base period.

That's way better than states that cap benefits at like $300 per week. Shows the value of having employers pay higher state unemployment taxes.

You typically file in the state where you worked most recently, but Washington ESD can combine wages from multiple states through interstate agreements. The taxes were paid by each employer in their respective states.

Good to know. I was worried about some kind of tax gap between states affecting my eligibility.

I've been trying to reach Washington ESD for two weeks about an overpayment notice. Maybe I should try something like that instead of wasting more time on hold.

Definitely worth it if you need to actually speak to someone at Washington ESD. The phone system there is brutal to navigate on your own.

Totally agree. Most people have no idea how any of this works until they need to file a claim. Would save a lot of confusion and stigma if it was better understood.

Yeah and it would help people understand why the system sometimes seems slow or bureaucratic. Washington ESD has to verify everything because it's insurance money, not just free government funds.