California Unemployment Tax Rates Hold Steady for 2021

By October 26, 2020News, Regional

The California Employment Development Department announced that unemployment tax rates are not to change for 2021.

Effective January 1, 2021, unemployment tax rates for experienced employers are to be determined with Schedule F+. As a result, tax rates for experience-rated employers will continue to range from 1.50% to 6.20%. Similarly, tax rates for new-employers in California will remain at 3.40% for 2021.

Additionally, positive-rated employers and new-employers are to be assessed an employment training tax of 0.10% for 2021, also unchanged from 2020.

California’s unemployment-taxable wage base is to remain at $7,000 in 2021, unchanged from 2020.

The lack of changes leaves industry experts asking why the EDD isn’t being more proactive. California continues to have the lowest taxable wage base in the country even though it is one of the highest average wage states in the union. Couple that with the very large Title XII loan balance (as of today’s writing, the balance is $14.5 billion and rising), and one could ask why the EDD doesn’t index the taxable wage base to average wages to increase the solvency of the state trust fund and eliminate a future increase in federal unemployment taxes for 2022.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Kathy Wilson

Author Kathy Wilson

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