AUSTIN The minimum Unemployment Insurance (UI) tax rate paid by Texas employers in Calendar Year (CY) 2010 will be 0.72 percent up from 0.26 percent in CY 2009 the Texas Workforce Commission (TWC) announced today. The rate increase is due to a higher UI benefit outlay in the past year. The taxes replenish the Texas Unemployment Compensation Trust Fund which provides unemployment insurance for Texas workers who lose their jobs through no fault of their own.
The minimum tax rate of 0.72 percent is paid by nearly 255000 employers or 67 percent of all experience-rated employers. An employer paying the minimum tax will pay $64.80 in tax per employee in CY 2010 compared with $23.40 in tax per employee in CY 2009.
Texas employer UI taxes at the minimum rate remain lower than many other states. Illinois employers at its minimum tax rate pay $81 per employee; Florida employers at its minimum tax rate pay $100 per employee; and Arkansas employers at its minimum tax rate pay $120 per employee.
The maximum UI tax rate paid by 3.3 percent of Texas experience-rated employers is 8.60 percent up from
6.26 percent in CY 2009. The average tax rate of 1.83 percent for CY 2010 is up from 0.99 percent in CY 2009 while the average experience tax rate of 1.74 percent for CY 2010 is up from 0.78 percent in CY 2009.
The components of the CY 2010 tax rate are:
- The general tax rate based on claims against an employers 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 deficit tax rate applies only to those employers who were experience rated in the previous year. TWC took action to reduce the deficit tax by 50 percent for CY 2010.
- 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 Employers Quarterly Tax Report.
