PA, Pennsylvania Unemployment Tax Rate for 2011, 2012

Employers will pay different unemployment tax rates depending on what type of an employee they have hired. The Pennsylvania Unemployment Compensation taxes are paid on the first $8,000 of wages earned for each employee.

The amount of taxes paid for each employee varies due to the experience of the worker and what type of work the employee is being paid for. The unemployment tax rates range from 2.21 percent to 10.5 percent.

Employers can use the withholding tax calculator by Intuit to determine their employees unemployment tax rate.

The rates are considerably different for a construction employee let’s say for example, the rate for him or her would be 10.5%. Now a non-construction employee would have a rate of 3.75% on up to the first $8,000 earned.

Time Changes Rate into Calculated Rate

The rates mentioned above pretty much stay the same for around two years and after that time the rate can change to a calculated rate. By then the employer should have enough experience to be entitled to a calculated rate.

Unemployed through Involuntary Causes

Here’s how the system works. The Pennsylvania Department of Labor & Industry takes care of administering the Pennsylvania Unemployment Compensation Law. Employers are paying into a reserve fund which is the Unemployment Compensation fund.

If the employee becomes unemployed through involuntary causes then, this is the fund where the unemployment benefits will come from. Of course it all varies based on the contribution rate and the wages paid to the employee. This is all calculated and determined on a calendar year.

FUTA (Federal Unemployment Tax Act) and the States

The FUTA tax an employer owes for the calendar year is based on the amount of wages an employer pays for employment during the year.

You have to keep in mind, the states and FUTA have different definitions of “employment,” employee,” “employer,” and “wages.” Now some payments may be exempt from FUTA but, may be subject to state unemployment tax.

Looking for more Information?

If you need more information or would like help calculating your Pennsylvania Unemployment Tax Rate, then I suggest you visit TurboTax Online. The website is very user friendly and the design is so straight forward, I know you will have no problem using their software.

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