During the month following each calendar quarter (April, July, October, and January), each employer submits an Employer's Quarterly Report. This report must show the total amount of gross wages paid during the quarter and the total amount of Taxable Wages Paid.
The report contains a Wages list on which the employer reports each employee's total gross wages paid for the quarter. Employees are listed by social security number and name, and the amount of total gross wages paid to each employee is shown.
Effective July 1, 2007, employers or other entities, including agents reporting on behalf of multiple employers, with 10 or more employees or have a cumulative total of 10 or more employees in any one calendar quarter, are required to report electronically, including via magnetic media, but all other employers are encouraged to report electronically as well.
The first $9,000 paid to an employee by an employer during a calendar year constitutes "taxable wages". An employer cannot consider wages paid by another employer to the employee in the calendar year in arriving at this limit unless he is a successor to the prior employer, and transfer of compensation experience is applicable.
Following is an example of the amount of wages to be reported by an employer, assuming that he had only one employee in 2007 to whom he paid $4,000.00 per month.
Employer's Quarterly Report
The employer must file reports for the second, third and fourth quarters of 2007 even though he owes no tax. Although reimbursing employers do not pay this tax, they must submit Employer's Quarterly Reports to report wages paid to their employees.
The amount of tax to be paid by an employer is computed by multiplying the amount of taxable wages paid during the quarter by the effective tax rate of the employer.
In the example under How Are Employee's Wages Reported?, the employer paid $9,000.00 in taxable wages in the first quarter of 2007 and his effective tax rate was 1.00%. Therefore, the amount of tax to be paid is 1.00% of $9,000.00 or $90.00. No tax is due for the second, third and fourth quarters.
Taxes are paid by submitting any banking instrument with the Employer's Quarterly Report. An employer or other entity, including agents paying on behalf of multiple employers, who paid taxes in the preceding fiscal year of $250,000 or more and anticipate to do the same in the current fiscal year, is required to transfer payment amounts by electronic funds transfer. Any employer may voluntarily elect to submit their taxes by electronic funds transfer.
"Wages" means all remuneration paid for personal services, including the cash value of all remuneration paid in any medium other than cash and gratuities received by any employee in the course of employment to the extent that the gratuities are considered as wages in the computation of taxes under the Federal Unemployment Tax Act, 26 U.S.C. Section 3301 et seq. (There are certain exceptions to the term "wages" which are listed in TUCA).
Wages are reported when they are paid rather than when they are earned or accrued.
Staff leasing is an arrangement by which employees of an entity known as a staff leasing services company are assigned to work at a client company. The term does not include: a temporary help service, and independent contractor, or a temporary common worker employer. In general an employer contracts with a leasing company and releases some or all of their employees to the leasing company. The employees are then leased back to the client company, usually to perform the same services for which they have been employed previously. The arrangement is intended to be a long-term or continuing nature, rather than temporary or seasonal in nature.
All staff leasing companies who intend to operate in the State of Texas must be issued a license by the Texas Department of Licensing and Regulation. A properly licensed leasing company will be considered the employer of all leased workers for purposes of the Texas Unemployment Compensation Act. Staff leasing firms will report wages and pay contributions on all workers leased to client companies under the leasing company's Texas Workforce Commission account number. In addition, each leasing company is required to report quarterly on forms prescribed by the Workforce Commission, the name, address, telephone number, federal employer identification number and standard industrial code number of the client company.
Leasing companies whose initial license application is denied or who have an active license revoked, will no longer be considered the employer by the Texas Workforce Commission. Each client of a leasing company without a valid license will be required to report their workers' wages and submit contributions under their own account number at their individually assigned tax rate. If a client's account has been in an "inactive" status for more than three calendar years and the company then resumes employment of their own workers, they will be reassigned a new account number and a tax rate of 2.7%.
A reimbursing employer is an employer which pays to the Fund, in lieu of taxes, an amount equal to the amount of benefits which were paid to his former employees and were attributable to service in the employment of such employer. A reimbursing employer reports wages for his employees and is billed quarterly for the amount of regular benefits and 50% of the extended benefits paid to his former employees during the prior quarter. A reimbursing employer makes no tax payments but is subject to the same penalties as a taxed employer for failure to file reports and/or make payments on time. A governmental employer must pay 100% of extended benefits based on wages earned from the governmental employer.
An election is effective for at least two calendar years and may be terminated after the minimum period by filing with the commission not later than December 1 a written request for termination. The termination is effective January 1 of the following year.
The following employers pay reimbursements instead of taxes: