How Will Unemployment Insurance (UI) Tax Increases Impact Your Business?
The NC Chamber in association with Headway Workforce Solutions is pleased to provide members with a Free online UI Tax Calculator. This simple and intuitive tool enables businesses to quickly play "what if" scenarios and see how potential North Carolina UI tax rate increases could impact their employment costs and ability to hire new employees.
Simply enter your total number of employees (state UI rates and taxes apply to your covered workers receiving payroll on their first $20,400 of wages paid during the year) and then select current and anticipated UI tax rates to learn the potential impact†† to your bottom line.
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*NC DES (Division of Employment Security)
††Disclaimer and Assumptions***: UI Tax Calculator is purely designed for illustrative purposes to give site users an idea as to how unemployment tax rates may or may not impact an entity’s taxes and UI tax costs and burdens. Assumptions, generalizations and estimates are included and the NC Chamber, neither directly or indirectly, implies that these rates or outcomes will or will not occur as well as to whether they are accurate or not. Base assumptions with the UI Tax Calculator include that all employees will reach the $20,400 wage base threshold with may or may not occur. No representations, claims or warranties are made by the NC Chamber or Headway Workforce Solutions with the use of or results from any calculations or assumptions made from this information or with the UI Tax Calculator. Please consider consulting with your tax advisor, accountant or attorney to learn about how this specifically may or may not impact your organization.
Problem: Failing NC Unemployment Insurance System Faces Crisis
5th Largest UI Debt in Nation > Business Bears the Weight
North Carolina owes $2.6+ billion to the federal government – 5th highest in U.S.
Interest on loans taken by NC to meets its UI obligations continues to accrue
UI program is funded solely by employers through state and federal unemployment payments
Unpaid debt is triggering mandatory federal tax increases on NC businesses that threaten jobs and economic recovery. Federal flat tax increase of 0.3% to Federal Unemployment Tax Act (FUTA) rates automatically occurred in January 2012.
FUTA taxes will continue to increase by an additional 0.3% each year until the debt is paid off.
Unemployment Remains High in NC
Record-high unemployment and a protracted economic recovery – approximately 450,000 North Carolinians out of work
NC 10% unemployment rate remains above 8.5% national rate
How did NC get here? The severity and length of the Great Recession caused high numbers of laid-off employees to turn to the state’s UI system for assistance with day-to-day expenses. Record-high unemployment rates, a very slow economic recovery, extended UI mandates from the federal government and an unbalanced and expensive benefits structure all combined to make what some might call a “perfect storm” for North Carolina’s UI system, forcing the state to borrow $2.6 billion to date to meet its UI obligations.
Solution: Restoring Solvency, Integrity and Affordability to UI System The North Carolina Chamber is working with a coalition of businesses and allied organizations to shape a forward-thinking, comprehensive solution to our state’s UI crisis that can serve as a national model for other states facing similar problems. Business must drive the solution.
Restoring Solvency, Integrity and Affordability
Repay the debt and assure trust fund solvency for the future
Provide greater accountability for the employer taxes funding the UI system
Enact checks and balances to ensure system efficiency
Reemployment > Getting North Carolinians Back to Work
Get our citizens back to work through worker retraining and education programs
Utilize NC’s world-class community college system to provide vocational training
Problem: Failing NC Unemployment Insurance System Faces Crisis