Employers in New York are responsible for understanding the state unemployment insurance (SUI) rates for New York. Here is everything that employers need to know.
Earlier this month, the New York State Department of Labor published its 2023 Unemployment Contributions Rates and began mailing notices of those rates to employers. If you are an employer in New York, you may have already received this notice or should receive it soon. Below are answers to some of the most common questions about 2023 unemployment contribution rates in New York, links to additional information, as well as what a New York payroll provider may need from you.
Common Questions on 2023 SUI Tax Rates
The following questions are those that New York payroll companies commonly received regarding unemployment tax contributions.
What are unemployment contributions?
Contributions are paid by employers to the state Department of Labor and are used to fund unemployment claims made by employees. These contributions are automatically calculated with each payroll.
For businesses that are on our New York payroll tax service, they are collected as part of your payroll debit, and then paid into the state each quarter with your NYS-45 tax return. They appear in payroll reports as “NY-SUI” and “NY Re-employment.”
How much are businesses required to contribute in 2023?
The amount employers contribute is determined by two factors: the assigned contribution rate, and the wage base, which is the portion of employee earnings subject to contributions.
For 2023, the New York wage base is $12,300, meaning contributions are due on the first $12,300 paid to each employee. If assigned a rate of 2.025%, then you would owe up to ~$249 (2.025% x $12,300) per employee for the year.
In addition, all companies are subject to a Re-employment Services Fund assessment of 0.075% on the wage base, for up to an additional $9 per employee. Certain companies such as religious organizations, educational institutions, and other non-profits may apply for “Reimburser” status, meaning they pay no contributions up front and instead must reimburse the state after the fact for any unemployment claims made against them.
How is my contribution rate determined?
Contribution rates are determined by several factors, including the overall balance of the unemployment system as a whole, and the number of unemployment claims filed by your employees in the prior calendar year.
If unemployment claims were made against you, you may see your rate increase in the following year. Employers can find contribution rate information on the New York DOL website.
In 2023, the lowest rate that may be assigned is 2.4%, and the highest is 8.9%. New companies are automatically assigned a rate of 4.025%.
EBC does not have access to any unemployment claim information, so if you have questions about how your rate was calculated, you will need to contact the NY Department of Labor directly at 888-899-8810.
Due to factors out of my control related to COVID, there were an unusually high number of unemployment claims filed against my company in 2020 and 2021. Did this affect my rate?
No. Per the Department of Labor, “No charges for benefit weeks after March 9, 2020, were used to calculate your 2021 unemployment contribution rate, nor are charges for benefit weeks payable in 2021 being used to calculate your rate for 2022.” As of now, there is no information on how claims made in 2022 will affect 2023 rates, but it’s likely the usual calculation method involving claims filed will apply.
I’ve already run payrolls in 2023 using the old 2022 rate. What if my 2023 rate is different?
Once your 2023 rate is entered into the payroll system, your prior 2023 payrolls will be re-calculated to determine your correct contributions due. If your rate decreased from 2022, then EBC will refund the excess amount that was collected with your payrolls directly to your bank account.
If your rate increases from 2022, there will be additional funds due which EBC will collect prior to filing your first quarter tax return. More detailed information about your new rate, and whether you will have a refund or owe additional contributions will be sent out in early March.
What if I have employees in other states?
Each state sets its own timeline for publishing rate notices. Many states sent out notices of their 2023 rates in December. Other states use a different calculation period; for example, New Jersey sets new rates effective July 1. Each state also sets its own wage base. Details can be found in each state’s Department of Labor.
Do I need to do anything?
No. You may send us a copy of your rate notice so that your account can be updated as early as possible, but EBC verifies unemployment rates for all our clients directly with each state’s Department of Labor prior to first quarter tax filing, so all your rates will be automatically updated even if you don’t send us your notice. If you have any questions or would like to send us your rate notice, please email 2022SUIRATENOTICE@ebchcm.com
Where can I find more information?
To see your company’s unemployment account information and rate history, visit https://apps.labor.ny.gov/UIEHP/, and log in using your Federal Employer Identification Number (FEIN) and NY Employer Registration Number. You may receive an error message during periods of high traffic, in which case you may have to try again later.
For more help with 2022 SUI Tax rates for New York, try contacting a New York payroll and HR provider.
For more detailed information about unemployment contributions and how rates are calculated, visit https://dol.ny.gov/unemployment/employer-unemployment-insurance-information