Unemployment Insurance Taxes Decrease in the State of Texas

Texas employers will see an across-the-board drop in their Unemployment Insurance (UI) taxes in 2012, with the standard minimum tax falling from $70.20 per employee to $54.90, the Texas Workforce Commission (TWC) announced. According to TWC, 63.8 percent of experience-rated employers, some 246,374 businesses, currently pay the state minimum tax. The minimum tax rate is set at 0.61 percent for 2012, down from 0.78 percent in 2011.

The average rate for all employers is set at 1.96 percent for 2012, down from 2.03 percent in 2011, while the average rate for experience-rated employers is 1.87 percent, down from 1.96 percent. The maximum UI tax rate, paid by 6.2 percent of Texas employers, is 7.58 percent, down from 8.25 percent in 2011.

In setting 2012 tax rates, TWC said that it "sought to minimize the effects of any increases and exercise all the authority given to it by state law to hold the tax rates to the lowest and most predictable rates possible." To keep taxes low, TWC suspended the deficit tax in 2011, a strategy supported by employer groups across the state. TWC has also recently increased work-search verifications and improved data sharing between agencies to prevent fraud and control costs. Texas’s minimum tax rate remains lower than that of other states, TWC said.

Texas SHRM
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Tyler, Texas 75711
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