State unemployment taxes declining in 2016

Here’s some good news for Washington employers.

The state Employment Security Department reported Wednesday that “tax rates in all 40 rate classes declined from 2015 to 2016, ranging from 0.10 to 5.7 percent, not counting delinquency taxes. About 83 percent of employers will move into a lower rate class or stay the same in 2016.”

Among the highlights of the report:

▪  83 percent of Washington employers will have a lower tax rate in 2016, 0.3 percent will remain the same, and 16 percent will move to a higher rate class.

▪  The average tax rate will decrease from an estimated 1.48 percent in 2015 to an estimated 1.26 percent in 2016. The average total tax paid per employee will decline by $48 to $277.

▪  About 39 percent of all taxable employers are in rate class 1, taxed at 0.10 percent. Ninety percent of employers in rate class 1 have five or fewer employees.

▪  The experience-rated portion of the 2016 unemployment tax (paid by rate classes 2 and higher) will be based on benefit payouts from July 2011 through June 2015.

▪  Unemployment tax collections will decrease from 2015 ($981 million) to 2016 (about $836 million).

▪  Employers will pay unemployment taxes on the first $44,000 of each employee’s earnings in 2016. For an employee earning $44,000 or more, the total tax for the year will range from $44 (employers in rate class 1) to $2,508 (rate class 40). On average, the total tax per employee will decline by $48 in 2016, to $277.

For more information, visit esd.wa.gov/employer-taxes/determining-your-tax-rates.

This story was originally published January 6, 2016 at 1:34 PM with the headline "State unemployment taxes declining in 2016."