Texas Unemployment Tax Rates Hold Steady for 2021

The Texas Workforce Commission announced that unemployment tax rates for 2021 will remain at pre-pandemic levels in accordance with legislative authority enacted.

As you may recall, the TWC announced in March 2021 that 2021 unemployment tax rates would be delayed while they coordinate with the Texas Legislature and the Governor’s Office to explore opportunities to keep tax rates as low as possible following the historic unemployment claims volume seen in 2020.  Our prior post relating to the March announcement can be found here.

Based on this week’s announcement from the TWC, Texas employers can expect to see lower tax rates than expected when the 2021 rates are finally released later this month.  They confirmed that the three adjustment factors included in the overall rate will remain unchanged for 2021:

  • UI Replenishment Rate = 0.18%
  • Deficit Tax Rate = 0.00%
  • Obligation Assessment = 0.03%

The purpose of holding the tax rate low is to curb a sharp increase in tax rates for 2021 and future years, thus allowing Texas employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

Here are a few quotes from TWC leadership as to why this decision was made:

“Texas employers continue to overcome the challenges of the past year and contribute to a strengthening economy.  Today’s action on UI taxes enables businesses to better focus resources on innovating and expanding jobs available to Texas workers.” – TWC Chairman Bryan Daniel

“Texas workers are eager to get back to work and help move our economy forward.  This decision to keep taxes low will encourage hiring and expand opportunities for working Texans.” – TWC Commissioner Representing Labor Julian Alvarez

“This decision gives stability and predictability to our UI tax structure.  Texas employers and Business leaders look forward to that stability especially after a year of rampant uncertainty.  This gives them the capacity they need to hire, expand and get Texas’ economy back on track.” – TWC Commissioner Representing Employers Aaron Demerson

No action is required by employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.


Josh Kendall

Author Josh Kendall

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