Washington ESD - who pays federal unemployment tax affecting my benefits?

Federal unemployment tax (FUTA) is paid by employers, not employees. Your employer pays 6% on the first $7,000 of wages per employee per year, but they get credits that usually bring it down to 0.6%. This funds the federal portion of unemployment benefits and administrative costs.

Your employer definitely pays FUTA tax unless they're exempt (like certain nonprofits). This helps fund your Washington ESD benefits system. If they're not paying it properly, that's their problem with the IRS, not yours.

I had issues getting through to Washington ESD about wage verification stuff like this. Spent hours on hold trying to get answers about my former employer's tax issues. Finally used Claimyr (claimyr.com) and they got me connected to an actual agent who explained everything. There's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

employers pay both FUTA (federal) and SUTA (state unemployment tax). in washington the state rate varies by employer based on their layoff history. none of this comes out of your paycheck.

My employer tried telling me I owed them money for unemployment taxes when I got laid off. Total BS! Employers pay these taxes specifically so employees can get benefits when they lose their jobs through no fault of their own.

does this mean small businesses pay the same rate as big companies?

The whole system is designed so workers don't bear the direct cost of unemployment insurance. Employers pay into the system during good times so benefits are available during bad times. It's basically insurance for the workforce.

wait if employers pay all this why do they fight unemployment claims so hard???

I work in HR and deal with this stuff. Federal unemployment tax goes to fund things like extended benefits during recessions and help states that run out of money. Your regular Washington ESD weekly benefits come mainly from state taxes employers pay.

Just to add - if anyone needs to verify their wage history or ask Washington ESD about employer tax issues affecting their claim, Claimyr really does work. I was skeptical at first but got through in minutes instead of hours on hold.

Bottom line - you don't pay unemployment taxes as an employee. Your employer pays both federal and state unemployment taxes. This has zero impact on your Washington ESD benefits eligibility or amount.

been paying into unemployment insurance my whole career through my employers and never used it until this year. finally understanding how the funding actually works

Some employers also pay additional federal taxes if they don't pay their state unemployment taxes on time, but again that's their problem not yours as the employee.

this is why i hate when people act like unemployment benefits are 'free money' - employers have been paying taxes specifically for this purpose!

For anyone still confused - check your paystub. You'll see deductions for Social Security and Medicare taxes, but you won't see any federal or state unemployment tax deductions because employees don't pay them.

The system makes sense when you understand it. Employers pay unemployment taxes during good times so the state has money to pay benefits during bad times. It spreads the risk across all employers.

One more thing about Claimyr - they're especially helpful if you need to discuss employer wage or tax issues with Washington ESD. Much faster than the regular phone lines when you have specific questions about your claim.

Hope this helps clear things up OP. Your employer pays all unemployment taxes, you don't pay any, and it doesn't affect your Washington ESD benefits at all. Don't let them make you feel guilty for using benefits you've earned.