The North Carolina unemployment insurance tax is a payroll tax paid by employers and used to fund unemployment benefits for qualified unemployed workers. Employers pay a quarterly tax based on a percentage of their payroll.

The Employment Security Commission (ESC) annually sends a letter to notify employers of their official tax rates. Depending on an employer’s experience rating (i.e., its claims history), the official tax rate can vary from 0% of payroll to as high as 6.84%. Most newly liable or startup employers are assigned the standard beginning tax rate of 1.2%.

Problems can arise when an employer is not truly a “startup” or when two employers combine by merger or other acquisition forms. Over the past few years, this has become particularly true in light of significant amendments to the unemployment insurance tax laws. Companies that incorrectly handle their unemployment insurance tax obligations can quickly a...(register to read more)

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