The State Unemployment Insurance system is basically a payroll tax that pays out to employees who have lost their jobs through no fault of their own and are actively seeking new employment. The amount you get depends on how long you have worked for your previous employer and the amount of money both you and your employer paid into the system.
A lot of people are unaware of the State Unemployment Insurance tax (SUI) because it is administered by the state’s Department of Labor and Industry. The reason the tax is not more widely known is that it is charged to employers based on the amount of wages that they pay their employees.
SUI (State Unemployment Insurance) tax may be referred to by some other names like:
- SUTA (State Unemployment Tax Act) tax
- Reemployment tax
- Unemployment benefit tax
If you are in the process of losing your job, there are several actions you can take to ensure that you will be able to collect the benefits you deserve. The State Unemployment Insurance (SUI) reporting process is one thing you will need to learn about. The SUI reporting process is fairly easy, but you must inform your employer of the process as soon as you know that you will be losing your job.
Who Qualifies For Unemployment Benefits?
Unemployment benefits can be a lifeline for workers who have lost their jobs through no fault of their own. However, not everyone qualifies for these benefits. Generally, to qualify, you must have been employed by your employer for a certain minimum period of time and you must be able to prove that you were unjustly fired or laid off. In some cases, employees who quit without giving notice or workers fired for committing “misconduct” may not qualify for unemployment benefits.
Who Pays For SUI?
Unlike state disability and state workers’ compensation programs, state unemployment insurance programs are funded by employers who pay a tax based on the wages of each employee. Employers are required to pay unemployment taxes to their state unemployment insurance agency. The tax is determined based on the amount of wages the employer pays each employee during a specified period (quarter, year, etc.). Companies are required to make contributions to the state unemployment insurance fund each year based on the amount of wages paid to their employees during the previous year.
However, there are some exceptions where workers are responsible for making SUI (State Unemployment Insurance) contributions. These exceptions are:
- Alaska
- Pennsylvania
- New Jersey
Final Words
Due to the COVID-19 pandemic, a lot of organizations were forced to furlough or lay off employees. To know more about the State Unemployment Insurance Tax, attend the Compliance Prime webinar.
