Employment Security Department: Frequently asked questions -- March 2009
Unemployment-insurance taxes
Q. How do you calculate an employer’s unemployment insurance taxes?
A.
Employers are assigned a tax rate based on their experience with unemployment. That means the more workers a business lays off, the more it will pay in taxes.
To determine the tax rate, we divide the total cost of all unemployment benefits charged to an employer in the past four years by the total taxable payroll for that same period. The resulting percentage is the benefit ratio, which determines the rate class. New employers are assigned a tax rate based on their industry. Beginning in 2008, new employers will pay taxes based on 90 percent of the average rate for their respective industry.
For 2009, employers will pay taxes on the first $35,700 of each employee's wages.
To determine the tax rate, we divide the total cost of all unemployment benefits charged to an employer in the past four years by the total taxable payroll for that same period. The resulting percentage is the benefit ratio, which determines the rate class. New employers are assigned a tax rate based on their industry. Beginning in 2008, new employers will pay taxes based on 90 percent of the average rate for their respective industry.
For 2009, employers will pay taxes on the first $35,700 of each employee's wages.
Q. What are the highest, lowest and average tax rates in Washington? How many rate classes are there?
A.
There are a total of 40 rate classes. In 2009, employers in the lowest rate class may pay as little as 0.35 percent, which equates to a maximum of $125 per employee per year. Employers in the highest rate class pay 6 percent, which equates to a maximum of $2,142 per employee per year. The average rate in Washington is about 1.77 percent, or $632 per employee per year.
Q. How do Washington’s unemployment taxes compare to rest of the United States?
A.
In 2008, Washington's average tax rate was the 5th-highest in the nation.
Q. When are unemployment taxes due?
A.
Taxes are due by the last day of the month following the last day of each quarter.
| Quarter One (Q1)
| January Q4 taxes due 1/31
| February
| March Q1 ends 3/31
|
| Quarter Two (Q2)
| April Q1 taxes due 4/30
| May
| June Q2 ends 6/30
|
| Quarter Three (Q3)
| July Q2 taxes due 7/31
| August
| September Q3 ends 9/30
|
| Quarter Four (Q4)
| October Q3 taxes due 10/31
| November
| December Q4 ends 12/31
|
Q. How can an employer register with Employment Security?
A.
New businesses and existing businesses that expand to include employees must complete a Washington state master application. This will establish an account with the departments of Labor & Industries, Revenue and Employment Security.
Q. How can an employer file unemployment tax reports with Employment Security?
A.
Employers can file quarterly tax reports electronically (preferred) or on paper forms. Electronic options include UIFastTax (free, downloadable software for tax and wage reporting) and UIWebTax (Employment Security’s Web-based tax-reporting system) and Employer Account Management Services (EAMS), a one-stop menu of Internet tolls for filing, paying and managing unemployment tax accounts. Visit the EAMS Web site for more information.
Q. Does Employment Security provide one-on-one assistance with its tax reports?
A.
Tax help is available through our district tax offices. Employers that file reports electronically can get help by calling 800-565-4660 or by e-mail.
