Business

Unemployment tax rates will be lower or stable for most employers in 2014

OLYMPIA — More than 80 percent of Washington employers will have lower or stable unemployment tax rates in 2014 compared to 2013, according to the state’s Employment Security Department.

Of the roughly 170,000 taxable employers, 29 percent will move into lower rate classes and 53 percent will remain in the same rate class as 2013. Another 18 percent will enter a higher rate class due to their layoff history over the past four years.

By comparison, in 2013, 14 percent of employers moved into lower rate classes, 61 percent stayed the same and 25 percent paid higher rates.

“The tide is turning, and we’re seeing a larger number of companies moving back down the rate ladder,” said Employment Security Commissioner Dale Peinecke. “That’s a very positive sign.”

There are 40 rate classes altogether, ranging from 0.14 percent to 5.82 percent for most employers. The total tax rate for each rate class will remain the same as in 2013.

Unemployment taxes will be assessed on the first $41,300 of each employee’s earnings in 2014. These taxes are paid entirely by employers; workers do not pay into the unemployment trust fund.

The average tax paid for each employee will decrease by $6, to $467 for the year. Each employer’s actual tax bill depends on its total payroll and rate class.

In 2013, Washington’s average unemployment tax rate ranked 26th-highest in the nation, down from fourth-highest in 2008.

Unemployment tax rates are established in state law. The Employment Security Department does not set the rates.

 

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