Many Texas employers will see lower unemployment insurance (UI) taxes this year, according to the Texas Workforce Commission (TWC).
The minimum tax rate, which 62% of Texas employers pay, decreased to 0.22% from 0.29% for the 2008 calendar year. An employer paying the minimum tax will pay $19.80 in tax per worker in 2008—down from $26.10 paid in 2007.
Three percent of Texas employers pay the maximum UI tax, which will be 6.22%—down from 7.70% in 2007.
The average 2008 tax rate of 0.98% dropped from 2007’s rate of 1.30%. The average experience tax rate dropped to 0.77% from 2007’s figure of 1.13%.
The state’s low unemployment rates have allowed the Unemployment Compensation Trust Fund, which provides benefits for Texas workers who lose their jobs through no fault of their own, to accumulate a surplus. The surplus allows the state to reduce UI taxes through a Surplus Tax Credit in 2008.
The decreased tax rates reflect the elimination of the obligation assessment, which was previously a component of the UI tax. In its last session, the Texas Legislature passed a measure that allowed the TWC to pay off bonds issued in 2003 to bolster the trust fund. Paying off the bonds early will save Texas employers an estimated $270 million in taxes in 2008.