Unemployment Tax
When employees are out of work through no fault of their own, unemployment insurance provides funds to tide an individual over until they can find another position.
Who has to pay unemployment tax?
Employers are fully responsible for unemployment taxes and unlike other salary deductions, employees do not contribute to unemployment tax payments. Businesses are required to make unemployment tax payments through their payroll tax contributions.
Filing Taxes
Employers must pay unemployment taxes either quarterly or when they make their payroll contributions. Business should check with their local Department of Labor to determine when and where payments must be made.
Rate of Tax
The current unemployment tax rate is 0.6% of the first $7,000 of wages: This $7,000 cap is called the taxable wage base. Any wages over $7,000.00 per year are not subject to unemployment tax.