Who pays unemployment insurance tax in Washington - employer or employee?

That's a relief! I was worried I wasn't contributing properly. So when I file for unemployment, the benefits come from what my employer paid in?

Exactly. All Washington ESD unemployment benefits are funded by employer contributions. The amount your employer pays depends on their claims history and industry rating.

Wait, some states make employees pay too? I had no idea it varied by state.

yep some states take it out of your check, washington doesnt though

This is super helpful! I'm starting my own business and was wondering about this. Do you know what the standard rate is for new employers?

New employers in Washington typically start around 2.7% of taxable wages, but it can vary by industry classification. You'll want to register with Washington ESD once you have employees.

So if my employer has had a lot of people file for unemployment, their rate goes up? That seems fair.

Never heard of that service before. Did they charge you anything?

There's a fee but it wasn't much compared to the time I saved. Worth it when you really need to talk to someone at Washington ESD.

So if I make $80,000, my employer only pays UI tax on the first $62,500?

Correct. The taxable wage base gets adjusted annually. Your employer would pay UI tax on $62,500 of your wages, not the full $80,000.

makes sense why some employers get nervous about people filing claims then

Exactly. Too many claims can increase their experience rating and raise their UI tax rate for future years.

Yes, employees can still file claims even if their employer is delinquent on UI taxes. Washington ESD will pursue the employer for unpaid taxes separately. The employee isn't penalized for their employer's non-payment.

Good to know! I was worried about that with my last job - the owner seemed pretty disorganized with taxes.

Wow, that's a huge difference from the starting rate. Do you try to avoid laying people off because of this?

It's definitely a factor in business decisions. Layoffs aren't just about severance costs - they impact your UI tax rate for years. But sometimes you have no choice.

That's actually a good point. Legally, employers can't discriminate based on unemployment claim history in most situations. Those questions are often outdated or inappropriate.

Some employers wrongly think previous unemployment claims indicate something negative about the applicant. It's unfortunate bias since filing for UI is often due to circumstances beyond the worker's control.

The UI taxes employers pay do cover Washington ESD's administrative costs, plus the actual benefit payments. It's all funded through employer contributions, not general state revenue.

That's how it's supposed to work. Companies with good employment practices get lower rates over time, while those with high turnover pay more.

seems like a good incentive system to me

I might need to try that service. Calling Washington ESD during business hours is nearly impossible with their call volume.

Never thought about it that way. So indirectly we are kind of paying for it through potentially lower wages?

It's one of many factors employers consider in compensation decisions, along with health insurance, workers comp, Social Security taxes, etc.

What's the maximum weekly benefit amount in Washington these days?

I think it's around $999 per week maximum, but it depends on your past wages. Most people get less than the max.

Perfect summary! Thanks for clearing that up. I feel much better about my paycheck now.

Really? How does that work for freelancers and contractors?

You have to apply for voluntary coverage with Washington ESD and pay quarterly taxes on your self-employment income. Not many people know about this option.

That employer was definitely wrong. You should never owe UI taxes as an employee in Washington. Sounds like they didn't understand the system.

yeah figured they were trying to scam me or something, glad I checked

Same experience here! Claimyr saved me so much time and frustration with the phone system.

Thanks everyone! This thread really helped me understand how the whole system works.

Glad we could help clarify the Washington UI tax system for you. It's definitely different from some other states.