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Tax Rates
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New Employer Tax Rates
Newly liable employers who do not acquire compensation experience from a previously liable employer begin with a predetermined tax rate set by the Texas Unemployment Compensation Act. That rate is set by the Texas Legislature and is the greater of the average rate for all employers in the NAICS code to which they belong or 2.70%. This percentage is multiplied by the taxable wages for each quarter to determine the amount of tax due for that quarter. The taxable wage limit is also set by statute and is currently $9,000.00 per calendar year, per employee.
These newly liable employers continue with the entry-level rate until they are chargeable throughout four full quarters. Chargeable simply means that they could have been charged with benefits to a former employee, it is not required that a claim be filed. In most cases an employer is not chargeable until their third quarter of paying wages. Employers must pay wages a minimum of 6 quarters to receive an experience rating.
Upon completion of the four chargeable quarters, an interim tax rate is assigned to the new employer and that rate is applicable for the duration of the calendar year that it is assigned. After that, an annual rate is assigned and it is applicable for a full calendar year. Tax rates (interim or annual) are calculated by using the taxable wages (upon which tax has been paid timely) and the amount of charges (if any) paid to former employees.
Experience Tax Rates
Tax Rate Formula
General Tax Rate (GTR) + Replenishment Tax Rate (RTR) + Obligation Assessment Rate (OA) + Deficit Tax Rate (DTR) + Employment Training Investment Assessment (ETA) = Effective Tax Rate.
The Commission, at its own discretion, may adjust the Replenishment and the Deficit Tax Rates.
Historical Tax Rate Information
For details on how the 2013 Annual Tax Rate is calculated, select the 2013 link under the "Year" column.
| Year | Taxable Wage Base | Minimum Tax Rate | Maximum Tax Rate | Average Tax Rate | Average Experience Tax Rate |
|---|---|---|---|---|---|
| 2013 | $9,000 | 0.54% | 7.35% | 1.82% | 1.71% |
| 2012 | $9,000 | 0.61% | 7.58% | 1.96% | 1.87% |
| 2011 | $9,000 | 0.78% | 8.25% | 2.03% | 1.96% |
| 2010 | $9,000 | 0.72% | 8.60% | 1.83% | 1.74% |
| 2009 | $9,000 | 0.26% | 6.26% | 0.99% | 0.78% |
| 2008 | $9,000 | 0.10% | 6.10% | 0.92% | 0.65% |
| 2007 | $9,000 | 0.29% | 7.70% | 1.30% | 1.13% |
| 2006 | $9,000 | 0.40% | 7.64% | 1.51% | 1.37% |
| 2005 | $9,000 | 0.58% | 8.02% | 1.74% | 1.63% |
| 2004 | $9,000 | 0.67% | 8.26% | 1.74% | 1.64% |
| 2003 | $9,000 | 0.67% | 8.47% | 1.68% | 1.56% |
Taxed Governmental Contribution Rates
A governmental employer's annual contribution rate is computed in accordance with Chapter 204, Subchapter F of the Texas Unemployment Compensation Act. Unemployment Insurance tax rates are computed for taxed governmental employers as a group. All taxed governmental employers have the same rate. Unemployment Insurance tax rates for taxed governmental employers are determined by how much the group has cost the Fund in benefit payments to their ex-employees as compared to the amount of taxes that the group has paid. The annual contribution rate is expressed as a percentage. The numerator is the amount of all benefits paid, less benefits paid and reimbursed from other sources. If the amount of benefits paid is greater than the contributions paid, the excess benefits paid shall be added. If the amount of benefits paid is less than the contributions paid, the excess contributions shall be deducted. The denominator is the amount of the total wages paid by employers in the group. The table shown below is the history of governmental tax rates for the previous ten years.
Historical Governmental Tax Rate Information
| Rate Year | Effective Tax Rate |
|---|---|
| 2013 | 0.10% |
| 2012 | 2.90% |
| 2011 | 0.80% |
| 2010 | 2.10% |
| 2009 | 0.50% |
| 2008 | 1.10% |
| 2007 | 0.50% |
| 2006 | 3.00% |
| 2005 | 0.30% |
| 2004 | 2.30% |
| 2003 | 0.70% |
Basis For Governmental 2013 Tax Rate Computation
| Benefits Paid and Charged to Taxed Political Subdivisions | $ 11,921,576.92 |
|---|---|
| - Contributions Collected in Excess of Benefits Paid (Reduction to Benefits Paid) | $ 12,187,590.29 |
| + Benefits Paid in Excess of Contributions Collected (Increase to Benefits Paid) | $ 0.00 |
| Adjusted Amount of Benefits Paid to All Claimants of Taxed Political Subdivisions for the year ended December 31st. | $ -266,013.37 |
| Total Wages Paid by all Taxed Political Subdivisions for the year ended December 31st. | $ 831,639,772.61 |
A governmental employer may elect to be a reimbursing employer and repay the Unemployment Compensation Fund, dollar for dollar, for benefits paid to former employees. Chapter 205, Subchapter A of the Texas Unemployment Compensation Act (TUCA) authorizes a Political Subdivision to elect reimbursement to the unemployment compensation fund in lieu of contributions.
To learn more about governmental employers, visit our Governmental Employers FAQ page.
Special Note About Chargebacks
A detailed listing of the individuals making up the three-year total of benefit chargebacks used in your Benefit Ratio may be obtained by using any of the following methods:
- Online: Unemployment Tax Services
- Phone: (512) 305-8708
- Fax: (512) 463-8185
- Email: taxexperience.rating@twc.state.tx.us
- Mail:
Texas Workforce Commission
Tax Department-Status Section - Rates Unit
101 E. 15th St Rm 514
Austin, Texas 78778-0001
If you have a question about an individual chargeback claim, include your account number, the claimant's Social Security Number and the initial claim date, and send the request to:
Texas Workforce CommissionUI Support Services
101 E. 15th St Rm 354
Austin, Texas 78778-0001
Please e-mail questions or comments to tax@twc.state.tx.us