Published: 12-11-08
AUSTIN – The minimum Unemployment Insurance (UI) tax rate paid by Texas employers in Calendar Year (CY) 2009 will be 0.26 percent up from a 25-year low in CY 2008. The new rate is the first increase in the employer UI tax rate since CY 2004 the Texas Workforce Commission (TWC) announced today.
The CY 2009 rate also reinstates the replenishment tax component of the tax rate which TWC temporarily suspended in CY 2008 due to strong economic conditions in Texas. The rate increase reflects higher UI benefit outlay in recent months. The taxes replenish the Unemployment Compensation Trust Fund which provides UI for Texas workers who lose their jobs through no fault of their own.
The minimum tax rate of 0.26 percent is paid by nearly 278000 employers or 74 percent of all experienced-rated employers. An employer paying the minimum tax will pay $23.40 in tax per employee in CY 2009.
Texas employer UI taxes at the minimum rate remain lower than many other states. Ohio employers at the minimum tax rate pay $63 per employee; Arkansas employers at the minimum tax rate pay $90 per employee; and California employers at the minimum tax rate pay $105 dollars per employee.
The maximum UI tax rate paid by 3.3 percent of Texas’ experience-rated employers is 6.26 percent up from 6.10 percent in CY 2008. The average tax rate of 0.99 percent for CY 2009 is up from 0.92 percent in CY 2008 while the average experience tax rate of 0.78 percent for CY 2009 is up from 0.65 percent in CY 2008.
The components of the CY 2009 tax rate are:
• The general tax rate – based on claims against an employer’s account. If TWC has paid benefits to former employees who were laid off or separated through no fault of their own in the past three years then those employers will pay a general tax.
• The replenishment tax rate – charged to all employers to cover unemployment claims not charged to a specific employer. This tax tends to rise following economic slowdowns when claims increase and businesses close.
• The employment training assessment – charged to all employers who are eligible for a computed tax rate to finance the Skills Development Fund and the Texas Enterprise Fund. The employment training assessment calculation is a separate line item on the Employer’s Quarterly Tax Report.
|
Year |
Taxable |
Minimum |
Maximum |
Average |
Average |
|
2009 |
$9000 |
0.26 |
6.26 |
0.99 |
0.78 |
|
2008 |
$9000 |
0.10 |
6.10 |
0.92 |
0.65 |
|
2007 |
$9000 |
0.29 |
7.70 |
1.30 |
1.13 |
|
2006 |
$9000 |
0.40 |
7.64 |
1.51 |
1.37 |
|
2005 |
$9000 |
0.58 |
8.02 |
1.74 |
1.63 |
|
2004 |
$9000 |
0.67 |
8.26 |
1.74 |
1.64 |
2009 UI Tax Rates
TWC is dedicated to finding ways to lower the financial impact of unemployment on Texas employers. TWC and its 28 local workforce boards are committed to assisting UI claimants return to work as soon as possible.
The agency has instituted initiatives to ensure program integrity in several areas and to increase UI fraud detection and prevention. Through the use of increased work-search verifications improved automated processes and database cross matches with other agencies TWC experienced a 35 percent reduction in the annual UI overpayment rate between CY 2006 and CY 2007. TWC pledges its continued efforts in helping to keep taxes as low as possible and mitigating the effects on Texas employers.
