What You Need to Know About SUI Rates Video

State Unemployment Insurance (SUI) works with federal unemployment taxes to provide benefits to unemployed workers. This small business video minute explains what SUI means to employers.

The fewer employees you terminate, the lower your SUI rate. SUI rates change and when they do, you'll need to update your payroll information or face an IRS notice. A reliable payroll service has tax experts to file your tax forms and keep you in compliance with government regulations.

Video Transcript

Welcome to the SurePayroll minute. I’m Michael Alter.

State Unemployment Insurance, or SUI, works with federal programs to give unemployed workers partial wage replacement while they look for employment.

As an employer, you pay State Unemployment Insurance for every employee each pay period.

Your State Unemployment Insurance rate varies based on the number of unemployment compensation claims you’ve had. So the fewer employees you terminate, the lower your SUI rate is likely to be.

Your state will inform you of your State Unemployment Insurance rate on an annual basis. If you are a new employer, your state will assign you an interim rate until you have filed unemployment taxes for a certain period of time.

When you receive a notice of a new State Unemployment Insurance rate from your state, note the effective date and make sure you update your payroll.If you don’t change your payroll to reflect the new rate, you could end up receiving a tax notice.

If you’re using a payroll service, you should be able to fax the tax department your new rate notice and expect your payroll to be updated accordingly. Be sure to keep all SUI rate notices for your records.

For the simple answer to small business issues, I’m Michael Alter with your SurePayroll Minute.