Washington’s unemployment tax rates for experience-rated employers are set to rise in 2021, though legislative action later may provide tax relief.
Effective January 1, 2021, unemployment tax rates for experience-rated employers are to range from 0.52% to 6.02%, compared with 0.13% to 5.72% in 2020. The rates include social cost tax rates ranging from 0.49% to 1.46% and an employment administration fund (EAF) tax rate of 0.03%.
New employers are to be assessed an unemployment tax rate generally equal to 115%, up from 90% in 2020, of the applicable average unemployment tax rate for employers in their industry category.
A solvency surcharge is not to be in effect for 2021, as the surcharge was waived under a proclamation (20-81) signed December 17, 2021 by Governor Jay Inslee.
Washington’s unemployment taxable wage base is to be $56,500 in 2021, up from $52,700 in 2020.
Unemployment tax rates may be lowered under measures proposed by Governor Inslee. Under the proposed relief measures, employers would be relieved of charges for unemployment benefits paid from March 22, 2020 to May 2, 2020.
Additionally, the flat social cost tax rate would decrease to 0.50% from 1.22% for 2021, then gradually increase annually to 0.90% in 2025. The solvency tax would be suspended from 2021 to 2025.
The measures would cause the average unemployment tax rate to be 1.17% for 2021. The average unemployment tax rate otherwise is projected to be 1.88% for 2021, up from 1.03% in 2020.
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