Unemployment tax rates in 2013 will be unchanged or lower for three-fourths of Washington employers, according to the state’s Employment Security Department.
Overall, the average total tax per employee will rise by $37, to $499 for the year. However, each employer’s actual tax bill will depend on the amount of wages paid to employees and the employer’s rate class.
Some employers will pay more in 2013 because their layoffs increased in the past four years, while others may see a slight increase due to the amount of wages that are taxed. Taxable wages – also called the taxable wage base – will increase from $38,200 in 2012 to $39,800 in 2013 because the state’s average wage grew in 2011.
In 2013, 14 percent of employers will move into lower rate classes, 61 percent won’t change, and 25 percent will move into higher rate classes. More than one-third of all employers will be in the lowest rate class because they had no layoffs in the past four years.
Thanks to a permanent tax cut approved by the state legislature and the governor in 2011, unemployment tax rates in each of the state’s 40 rate classes will remain unchanged from 2012, ranging from 0.14 percent to 5.82 percent.
Employment Security Commissioner Paul Trause noted that most employers in this state have been spared the large rate hikes that are occurring in other states in the wake of the recession because Washington entered the recession with a healthy benefits trust fund.
“We didn’t have to borrow money to pay benefits, and that’s paying big dividends for our employers during the economic recovery,” said Trause. “Instead of raising tax rates to pay off loans, we were able to cut them.”
In Washington, unemployment taxes are based largely on each employer’s layoff experience, averaged over four years. The more benefits paid out to former employees in the past four years, the higher the employer’s tax rate will be.
For 2013, the experience-based portion of the unemployment tax will reflect benefits paid from July 2008 through June 2012, which includes the peak years of the recession.
Beginning in 2014 and beyond, many employers will begin to slide back down the rate scale as recession years are gradually dropped and post-recession years are added to the calculation.