Running payroll means staying on top of your employment tax responsibilities. In addition to withholding income and payroll taxes from employee wages, you must contribute employer taxes. Unlike some other taxes, state unemployment taxes do not have a standard rate. Read on to answer What is my state unemployment tax rate?
About state unemployment tax
When you have employees, you must pay federal and state unemployment taxes. These taxes fund unemployment programs and pay out benefits to employees who lose their jobs through no fault of their own.
Generally, unemployment taxes are employer-only taxes, meaning you do not withhold the tax from employee wages. However, some states require that you withhold additional money from employee wages for state unemployment taxes.
State unemployment tax is a percentage of an employee’s wages. Each state sets a different range of tax rates. Your tax rate might be based on factors like your industry, how many former employees received unemployment benefits, and experience.
You pay SUTA tax to the state where the work is being done. If your employees all work in the state your business is located in, you will pay SUTA tax to the state your business is located in. But if your employees work in different states, you will pay SUTA tax to each state an employee works in.
States also set wage bases for unemployment tax. This means you will only contribute unemployment tax up until the employee earns a certain amount.
State unemployment taxes are referred to as SUTA tax or state unemployment insurance, or SUI. Or, they may be referred to as reemployment taxes (e.g., Florida).
How to get your SUTA tax rate
When you become an employer, you need to begin paying state unemployment tax. You need to sign up for a SUTA tax account with your state government.
Register as an employer online using your state’s government website. You might also be able to register for an account by mailing a form to your state. Each state has a different process for obtaining an account. Check your state’s government website for more information.
To register for an account, you need to provide information about your business, such as your Employer Identification Number. When you register for an account, you will obtain an employer account number.
Once registered, your state will tell you what your contribution rate is. And, your state will also tell you what your state’s wage base is.
Many states give newly registered employers a standard new employer rate. The new employer rate varies by state.
Some states split new employer rates up by construction and non-construction industries. For example, all new employers receive a SUTA rate of 1.25% in Nebraska, and all new construction employers receive a SUTA rate of 5.4% in 2019.
If you live in a state that doesn’t use a standard new employer rate, you must wait for your state to assign you your starting rate.
Your state will eventually change your new employer rate. The amount of time depends on the state. You may receive an updated SUTA tax rate within one year or within a few years. Most states send employers a new SUTA tax rate each year.
Generally, states have a range of unemployment tax rates for established employers. Your state will assign you a rate within this range. For example, the SUTA tax rates in Texas range from 0.36% – 6.36% in 2019.
SUI tax rate by state
Here is a list of the non-construction new employer tax rates for each state and Washington D.C. Note that some states require employees to contribute state unemployment tax.
|State||New Employer Tax Rate||Employer Tax Rate Range|
|Alabama||2.7%||0.65% – 6.8%|
|Alaska||Maximum employer share of 1.28%||1.5% – 5.9%|
|Arizona||2.0%||0.05% – 6.38%|
|Arkansas||3.2%||0.4% – 14.3%|
|California||3.4%||1.5% – 6.2%|
|Colorado||1.7%||0.62% – 8.15%|
|Connecticut||3.4%||1.9% – 6.8%|
|Delaware||1.6%||0.3% – 8.2%|
|D.C.||2.7% + 0.2% Administrative Fee||1.6% – 7%|
|Florida||2.7%||0.1% – 5.4%|
|Georgia||2.7%||0.4% – 8.10%|
|Hawaii||2.4%||0.01% – 5.6%|
|Idaho||1.0%||0.251% – 5.4%|
|Illinois||3.175%||0.475% – 6.85%|
|Indiana||2.5%||0.5% – 7.4%|
|Iowa||1.0%||0% – 7.5%|
|Kansas||2.7%||0% – 7.1% (normally 7.6%, but 7.1% with 0.5% solvency adjustment)|
|Kentucky||2.7%||0.3% – 9.0%|
|Louisiana||Varies||0.1% – 6.2%|
|Maine||1.83%||0% – 5.4%|
|Maryland||2.6%||0.3% – 7.5%|
|Massachusetts||1.87%||0.73% – 11.13%|
|Michigan||2.7%||0.06% – 10.3%|
|Minnesota||Varies||0.10% – 8.9%|
|Mississippi||1.0%||0.2% – 5.4%|
|Missouri||2.376%||0% – 6% (does not include maximum rate surcharge or contribution rate adjustment)|
|Montana||Varies||0.13% – 6.3% (including AFT rate)|
|Nebraska||1.25%||0% – 5.4%|
|Nevada||2.95%||0.25% – 5.4%|
|New Hampshire||Varies||0.1% – 7%|
|New Jersey||2.8%||0.4% – 5.4%|
|New York||3.2% (including RSF)||0.6% – 7.9% (including RSF)|
|North Carolina||1.0%||0.6% – 5.76%|
|North Dakota||1.21% (positive balance) / 6.15% (negative balance)||0.15% – 9.75%|
|Ohio||2.7%||0.3% – 11.5%|
|Oklahoma||1.5%||0.1% – 5.5%|
|Oregon||2.4%||0.9% – 5.4%|
|Pennsylvania||3.689% (including surcharge)||2.3905% – 11.0333% (+ 3% penalty for delinquent status)|
|Rhode Island||1.46% (including 0.21% Job Development Assessment and the 2019 0.08% Job Development Adjustment)||1.1% – 9.7%|
|South Carolina||1.03%||0.06% – 5.46%|
|South Dakota||1.2% + 0.55% Investment Fee||0% – 9.35%|
|Tennessee||2.7%||0.01% – 10%|
|Texas||Varies||0.36% – 6.36%|
|Utah||Varies||0.1% – 7.1%|
|Vermont||1.0%||0.4% – 8.4%|
|Virginia||2.5%||0.1% – 6.2%|
|Washington||Varies||0.13% – 5.72%|
|West Virginia||2.7%||1.5% – 8.5%|
|Wisconsin||3.05% for new employers with payroll < $500,000 3.25% for new employers with payroll > $500,000||0% – 12%|
|Wyoming||Varies||0.18% – 8.72%|
For some states, this SUTA tax rate includes other taxes. Contact your state for more information.
How to pay unemployment tax to your state
You must report your SUTA tax liability to your state and make payments. Generally, you will need to make quarterly payments. Use your employer account number to report and deposit your SUTA tax liability.
Contact your state for more information about reporting and depositing SUTA tax.
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This article has been updated from its original publication date of July 16, 2018.
This is not intended as legal advice; for more information, please click here.