How do unemployment taxes work?

[Toronado3800]

After a conversation with some of my young friends I must understand this completely before I choose to berate them. Please explain how I am incorrect or only partly understanding the system.

It is my understanding the Federal Government more or less charges $56 per employee per year for their portion of unemployment benefits.

I believe all the state systems to vary but it true on average they charge ABOUT 3% of the first $7,000 an employee earns or $210 per year. The employer (company) pays this amount. My boss must figure it into the cost of having an employee as he is effectively forced to by the state for my benefit as an employee.

There is a movement to more or less double the earning limit to the first $15,000 an employee makes but that is not active yet.

So after 20 years of working earning more than $7,000 per year the average company (me if you prefer to think of it that way as a potential amount of money we could have earned) has paid $56*20=$1,120 in Federal taxes and $210*20=$4200 in state taxes.

With a further SOOOO... they have 'earned' $5320 in benefits?

Also, when an employee is collecting benefits does that money come from largely the state fund then the federal fund or is there an additional charge the company who fired the employee pays during the benefit time? (This goes towards the folks who think they are staying unemployed to "get back" at their old boss)

Thanks in advance

 

[Madeline]

Holy shit, homework!

EGADS!!

 

[uscitizen]

I think the part the employer pays depends on their layoff history as well.

but I really do not know, all I know is that there was never a deduction on any of my paychecks for unemployment insurance.

 

[Madeline]

I think the part the employer pays depends on their layoff history as well.

but I really do not know, all I know is that there was never a deduction on any of my paychecks for unemployment insurance.

Isn't FICA unemployment tax, uscitizen?

 

[Toronado3800]

I believe FICA is just Social Security and Medicare.

This math stuff interests me. I would love to be able to tell ppl "you have collected more unemployment than you have paid in. GET TO WORK AT MCDONALDS AND PAY MY KID BACK!"

Once again "you" is them and their employer. Same entity more or less for this forced tax. Or heck, if the math is different and we each have paid $1,000,000 in unemployment insurance taxes perhaps it isn't so bad to collect your 99 weeks.

 

[Madeline]

I believe FICA is just Social Security and Medicare.

This math stuff interests me. I would love to be able to tell ppl "you have collected more unemployment than you have paid in. GET TO WORK AT MCDONALDS AND PAY MY KID BACK!"

Once again "you" is them and their employer. Same entity more or less for this forced tax. Or heck, if the math is different and we each have paid $1,000,000 in unemployment insurance taxes perhaps it isn't so bad to collect your 99 weeks.

It's insurance, Toronado. You spread the risk among your group and are paying a premium. If you never have a claim, you never collect.

I dun think anyone is confused that 99 weeks of benefits is likely far more than any employee paid in. But you could buy disability insurance, get disabled the following month and collect for 50 years (in theory).

Dat's the insurance game.

 

[Toronado3800]

True. I almost feel entitled to an insurance claim if I have had my homeowners for twenty years and then something happens.

Does my math seem right that after 20 years of working my unemployment taxes are only 5300 bucks or so?

 

[Toronado3800]

Anyone had this come up lately? I know I am not the only one who knows a bunch of unemployed 20somethings who are soaking up unemployment refusing to take under emoloyment as they believe they are just getting their taxes back.