Texas Unemployment Insurance Tax Rates to Rise for 2011

The standard minimum unemployment insurance (UI) tax rate paid by Texas employers in calendar year (CY) 2011 will be 0.78 percent, up from 0.72 percent in CY 2010, the Texas Workforce Commission (TWC) announced.

The taxes replenish the Texas Unemployment Compensation Trust Fund which provides unemployment insurance for Texas workers who lose their jobs through no fault of their own.

TWC said the increase in the employer tax rate increase was necessary to offset two years of higher UI benefit payments. Taxes would have been significantly higher without the actions taken by the commission, including use of a public bond sale and suspending the deficit tax component of the tax rate.

The minimum UI tax rates are paid by 213,000 or 63 percent of all experience-rated employers. An employer paying the standard minimum tax will pay $70.20 in tax per employee in CY 2011 compared with $64.80 in tax per employee in CY 2010.

The maximum UI tax rate, paid by 2.2 percent of Texas experience-rated employers, is 8.25 percent, down from a maximum rate of 8.60 percent in 2010. The average tax rate of 2.03 percent for 2011 is up from 1.83 percent in 2010, while the average experience tax rate of 1.96 percent, an increase from 1.74 percent in 2010.

TWC said Texas employer UI taxes at the minimum rate remain lower than many other states. Alaska employers at its minimum tax rate pay $201 per employee; Arkansas employers at its minimum tax rate pay $100 per employee; and Illinois employers at its minimum tax rate pay $89 per employee, according to the commission.

Source: Texas Workforce Commission