Who is required to pay unemployment insurance taxes?

• Employers are responsible for paying unemployment insurance taxes at both the federal (FUTA) and state (SUTA) levels.

• This applies to most businesses, including private companies, nonprofit organizations, and government entities with employees.

• The amount an employer pays may vary based on factors such as:

  • Total wages paid to employees

  • Employer’s experience rating (based on prior unemployment claims)

  • State-specific UI tax rates and taxable wage bases

• UI taxes fund the unemployment benefits paid to eligible workers who lose their jobs through no fault of their own.