Unemployment Compensation Tax

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Unemployment Compensation Tax

A tax levied on an employer that pays the unemployment insurance for the unemployed labor force. The tax is assessed as a proportion of the employer's payroll; the employer generally passes on payment of the tax to his/her employees.
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References in periodicals archive ?
US Department of Labor, Office of Unemployment Insurance, Significant Measures of State Unemployment Insurance Tax Systems 2017, February 2018, https://oui.doleta.gov/unemploy/pdf/sigmcasures/sigmcasuitaxsys17.pdf; and US Department of Labor, Employment and Training Administration, "ET Financial Handbook 394 Report," March 11, 2019, https://oui.doleta.gov/unemploy/hb394/hndbkrpt.asp.
The BIA also sought triggers so that funding to the programs stops if the unemployment trust fund sinks to a point that might mean an increase in the unemployment insurance tax rate.
Once a year, the government compares its nonfarm payrolls data, based on monthly surveys of a sample of employers, with a much more complete database of unemployment insurance tax records.
Each state is given the right to administer an unemployment insurance program within the guidelines established by the federal government; the programs are funded by the unemployment insurance tax that is generally imposed on employers.
The tax ranking looks at each state's corporate tax, individual income tax, sales tax, unemployment insurance tax and property tax rates to arrive at an overall ranking.
Employee Outsourcing Firms Get Tax Break, by Jay Root - A politically connected group of businesses will soon be getting a tax break, but all the other employers in Texas will have to pay for it through slightly higher unemployment insurance tax rates.
Rankings are based on the rates for individual income tax (32.1 percent of each state's score), sales tax (21.6 percent), corporate tax (20.6 percent), property tax (14.6 percent) and unemployment insurance tax (11.1 percent).
Without the freeze, business groups had warned that employers would be facing a $500 million rate increase and that Massachusetts would be left with the nation's highest unemployment insurance tax.
According to an article in the August, 2013 edition the "Small Manufacturing Association of California Newsletter," the proposal is to increase the amount of wages subject to unemployment insurance tax from $7,000 to $9,500, and eventually to $12,000.
Employers - who pay 100% of the unemployment insurance tax - would be forced to pay an additional $186 per employee in 2019 than they paid in 2011.
It also boasts one of the lowest unemployment insurance tax rates and workers' compensation rates, which undoubtedly appeals to corporate leaders but is a questionable draw for skilled workers.

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