Unemployment Tax Question

[Baron Von Murderpaws]

Ok, I've been trying to figure out how companies pay unemployment taxes, and I can't find anything online aside from the UE tax rates they are supposed to pay.

How does the state calculate how a company pays UE taxes?

Do they charge them per employee paycheck? Per employee quarter? Per how many employees they have?

Is there a way to find out how much a company paid in UE tax per employee, per year?

Does anybody know?

 

[Baron Von Murderpaws]

Ok, I found this, but I'm not understanding it.

Unemployment Insurance Tax Rates | Texas Workforce Commission

Learn more about how TWC and the state of Texas calculate unemployment tax rates.

www.twc.texas.gov

Does the chart mean the UE tax rate is PER $9,000 they pay an employee per year?

I'm not all that good with accounting and taxes, so I'm not understanding what they have there.

 

[Blues Man]

Ok, I've been trying to figure out how companies pay unemployment taxes, and I can't find anything online aside from the UE tax rates they are supposed to pay.

How does the state calculate how a company pays UE taxes?

Do they charge them per employee paycheck? Per employee quarter? Per how many employees they have?

Is there a way to find out how much a company paid in UE tax per employee, per year?

Does anybody know?

View attachment 660855

SUTA and FUTA taxes are based on payroll

How to Calculate Federal Unemployment Tax (FUTA) in 2024

Businesses contribute to federal unemployment through a payroll tax that is deducted from employee's check. The Ascent shows how to calculate FUTA Tax.

www.fool.com

 

[Baron Von Murderpaws]

SUTA and FUTA taxes are based on payroll

How to Calculate Federal Unemployment Tax (FUTA) in 2024

Businesses contribute to federal unemployment through a payroll tax that is deducted from employee's check. The Ascent shows how to calculate FUTA Tax.

www.fool.com

Ok, lots of info there...........
But again, I'm not an accountant or know anything about company taxes.

How would *I* find out how much the company I worked for paid on me?

I know how much I made, and I can find the tax rates they paid. How is the math done?

Or could you give a guesstimate? I can work with guesstimates.
I'm averaging this out, so it's not exact, but I can work with it.

$37,000 per year wages paid
using this chart

 

[Hang on Sloopy]

Ok, I've been trying to figure out how companies pay unemployment taxes, and I can't find anything online aside from the UE tax rates they are supposed to pay.

How does the state calculate how a company pays UE taxes?

Do they charge them per employee paycheck? Per employee quarter? Per how many employees they have?

Is there a way to find out how much a company paid in UE tax per employee, per year?

Does anybody know?

View attachment 660855

Our company pays about 1% of an employees unemployment insurance. Think of it as a policy paid by the employers

Same with workers comp, an employee paid workers protection plan

 

[whitehall]

That's one of the reasons why small mom and pop companies pay their help "off the books". You will see more of it as the government exercises more control over businesses.

 

[Independent thinker]

Ok, I've been trying to figure out how companies pay unemployment taxes, and I can't find anything online aside from the UE tax rates they are supposed to pay.

How does the state calculate how a company pays UE taxes?

Do they charge them per employee paycheck? Per employee quarter? Per how many employees they have?

Is there a way to find out how much a company paid in UE tax per employee, per year?

Does anybody know?

View attachment 660855

I am an employer who pays UE taxes. Tax rates are different for different companies depending on a few different factors and there is usually a limit, at which time you don't pay them anymore once an employee reaches that limit. I pay mine quarterly but every state is different and has different rules and different limits. Some companies in my state have to pay monthly. This information is usually private and not available to the public. It would be helpful if you told me why you wanted to know.

 

[RodISHI]

Each company has an experience rating which determines the rate. We rarely laid people off so our rate was very low percentage. Construction companies lay off more often so their percentage is higher.

 

[Rambunctious]

Understanding Employer Responsibility for Unemployment Benefits

Paying unemployment taxes is not optional. It's important that businesses know all the rules because paying them incorrectly can result in hefty fines.

www.paycor.com

 

[Independent thinker]

That's one of the reasons why small mom and pop companies pay their help "off the books". You will see more of it as the government exercises more control over businesses.

I don't think most of those businesses realize that, in the end, they may wind up paying more in taxes by paying "off the books" than if they just did things right. This is because when you pay employees legitimately, you get a 100% write off not only on their wages but on all the taxes and other expenses you pay for them. When you pay these employees "off the books" you get zero deduction for the money you pay them, which means that it inflates your business income which, in the end, you will be paying federal, state, and local taxes yourself on the money you paid them because it can't be deducted. For example:

Let's say that over the course of the year you pay $10,000 under the table to workers. Of course you save on the taxes and other expenses that you would pay in addition to that $10,000. But, you can't write off the $10,000 you paid them so it winds up, on paper, making you look like you earned $10,000 more for the year in profit than you actually did and you have to pay taxes on that money yourself, as if YOU actually earned it yourself. To make things simple, let's say that you are in the 12% federal income tax bracket and guess that you pay 5% in state taxes. So, on that $10,000 that you couldn't write off, you wind up paying a total of $1700 more in personal federal and state income taxes than you would have if you had not paid under the table. So, that makes you $1700 in the hole in that regard so you better hope that the taxes and other expenses that you "saved" by paying these workers under the table actually adds up to more than that $1700. Many of these businesses who do that would be surprised to find out that they are actually personally losing money by paying under the table.

 

[whitehall]

I don't think most of those businesses realize that, in the end, they may wind up paying more in taxes by paying "off the books" than if they just did things right. This is because when you pay employees legitimately, you get a 100% write off not only on their wages but on all the taxes and other expenses you pay for them. When you pay these employees "off the books" you get zero deduction for the money you pay them, which means that it inflates your business income which, in the end, you will be paying federal, state, and local taxes yourself on the money you paid them because it can't be deducted. For example:

Let's say that over the course of the year you pay $10,000 under the table to workers. Of course you save on the taxes and other expenses that you would pay in addition to that $10,000. But, you can't write off the $10,000 you paid them so it winds up, on paper, making you look like you earned $10,000 more for the year in profit than you actually did and you have to pay taxes on that money yourself, as if YOU actually earned it yourself. To make things simple, let's say that you are in the 12% federal income tax bracket and guess that you pay 5% in state taxes. So, on that $10,000 that you couldn't write off, you wind up paying a total of $1700 more in personal federal and state income taxes than you would have if you had not paid under the table. So, that makes you $1700 in the hole in that regard so you better hope that the taxes and other expenses that you "saved" by paying these workers under the table actually adds up to more than that $1700. Many of these businesses who do that would be surprised to find out that they are actually personally losing money by paying under the table.

The "write off's" and stuff don't come automatically. It's a complicated system involving tax accountants. It's easier to throw a couple of bucks to the shelf stocker.

 

[Independent thinker]

The "write off's" and stuff don't come automatically. It's a complicated system involving tax accountants. It's easier to throw a couple of bucks to the shelf stocker.

There are a lot of variables but I still say that a lot of the small mom and pops who think they are saving money, are actually losing money if they were to run the numbers. Instead, all they can think of is how much they're saving by not having to pay the taxes on employees. It's not as simple as they believe it is.