What is Virginia Unemployment Insurance, and who must pay UI taxes?

Virginia Unemployment Insurance (UI) is a state-administered program that provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own.

Who must pay UI taxes:

• Most employers in Virginia who pay wages to employees are required to pay unemployment insurance taxes.

• This includes private businesses, nonprofits, and certain government entities.

• New employers must register with the Virginia Employment Commission (VEC) to obtain a UI account number.

UI taxes are calculated based on taxable wages and the employer’s assigned tax rate. Paying these taxes ensures that employees remain eligible for benefits if they become unemployed.