NY State Unemployment Tax Rates: Wage Base, FUTA, and Filing

New York employers pay a state unemployment insurance tax at rates between 1.7% and 9.5% in 2026, applied to the first $17,600 of each employee’s wages for the year.¹ Most new employers start at a combined 4.1%. Your exact rate is set each March by the Department of Labor and reflects your company’s claims history, the health of the state’s unemployment trust fund, and a small flat charge that applies to everyone.

What Your Rate Is Actually Made Of

The single percentage on your rate notice is really three charges bundled together.

The normal contribution is the base rate driven by your experience rating. New employers who haven’t built a claims history yet pay a default normal rate of 3.4%.¹

The subsidiary contribution is an added percentage that moves with both your own account standing and the overall balance of the state’s general unemployment account. When the trust fund is healthy, subsidiary rates fall; when it’s strained, they rise. The schedule produces rates anywhere from 0.000% to 0.925%.²

The Re-employment Service Fund (RSF) is a flat 0.075% charge on taxable wages that every contributory employer pays. It funds job counseling and placement services for unemployment claimants.³

When the Department of Labor quotes your “UI rate,” that figure already combines the normal and subsidiary pieces. Add the 0.075% RSF to get what you actually owe.

Starting Rate for a New Business

If your business is new to New York, you pay a default rate until the state has enough wage and claims history to calculate a personalized one. For 2026, that total is 4.1%: a 4.025% UI rate plus the 0.075% RSF.¹

Industries with historically high turnover, such as construction and apparel, may instead be assigned a starting rate based on the average experience of all employers in that classification. If you operate in one of those sectors, read your rate notice carefully; your starting point can run higher than 4.1%.

New employers also sit on the expensive end of the subsidiary scale. Until you’ve been liable for contributions for at least five full calendar quarters, you’re assigned the highest subsidiary rate that applies to employers with a positive account percentage, and you work your way down only as you build a track record.

How Your Rate Changes Over Time

After roughly a full payroll year, the Department of Labor transitions you from the default to a personalized rate under the experience rating system in Labor Law Section 581.⁴ The calculation compares your account balance to your taxable payroll. Every dollar of benefits paid to your former employees is charged against your account; every dollar of contributions you pay in is credited to it. A healthy positive balance produces a lower rate. A depleted or negative balance pushes you toward the top of the scale.

Each March, the Department of Labor mails Form IA 97, the Notice of Unemployment Insurance Rate, showing your assigned rate for the year.⁵ Read it closely. If the numbers look wrong, you may have been charged for benefits that shouldn’t have hit your account.

Protesting Charges Against Your Account

When a former employee files for unemployment, you receive Form LO 400, the Notice of Potential Charges. If the separation was for misconduct or a voluntary quit without good cause, you have 10 calendar days from that notice to file a protest.⁶ Miss the window and the charges stick regardless of the facts.

You’ll later receive Form IA 96, the Notice of Experience Rating Charges, showing actual dollar amounts billed to your account. If charges appear for weeks the claimant actually worked for you and received full wages, you have 30 days to respond.⁶ Letting either deadline lapse is one of the most common reasons employers end up paying more than they should.

Voluntary Contributions

If your experience rating produces a higher rate than you want to carry, you can make a voluntary contribution to your account before March 31 of the current year. The payment improves your account balance, which can lower your assigned rate for that year and sometimes future years.⁷ The math doesn’t always favor you, so compare the voluntary payment against the tax savings a lower rate would produce across your full taxable payroll. The Department of Labor publishes a worksheet for the calculation.

The Taxable Wage Base

SUI tax applies only up to a capped slice of each worker’s annual earnings. For 2026 that cap is $17,600 per employee. Once a worker’s year-to-date gross wages pass that figure, you owe no further SUI on their wages for the rest of the year.⁸

Starting in 2026, the base adjusts automatically each January 1 to 18% of the state’s average annual wage, rounded up to the nearest $100, calculated from the four most recent quarters of census data. The base cannot decrease from one year to the next.⁸ Expect the figure to climb over time, which means your annual SUI bill will grow even in years when your rate holds steady.

How Your State Rate Affects Your Federal Unemployment Tax

Federal unemployment tax (FUTA) runs alongside the state tax. The base FUTA rate is 6.0% on the first $7,000 of each employee’s wages, but employers who pay their state unemployment taxes on time receive a credit of up to 5.4%, bringing the effective federal rate down to 0.6%.⁹ Paying your New York SUI late can cost you that credit.

The credit also shrinks if New York borrows from the federal government to pay benefits and doesn’t repay within two years. When that triggers a FUTA credit reduction, employers statewide owe extra federal tax. New York borrowed heavily during the pandemic, so check each year whether a reduction applies. FUTA is reported annually on IRS Form 940, separate from your quarterly New York filings.

If You Buy an Existing Business

Acquire all or part of a New York business and you inherit the seller’s unemployment insurance experience rating, including any negative account balance. The state treats a transfer as having occurred when you take over the seller’s obligations, acquire goodwill, continue the same operations, or keep substantially the same workforce.¹⁰

In a full acquisition, the seller’s account closes and its full history merges into yours, with your rate recalculated as of the transfer date. In a partial acquisition, the Department of Labor decides what share of the seller’s experience transfers based on information from the prior employer.

One helpful rule: when you take over mid-year, you can count the wages the previous employer already paid to transferred employees toward the $17,600 wage base, which prevents you from paying SUI twice on the same earnings. You must notify the Department of Labor about the transfer by the end of the calendar year following the year it occurred.¹⁰

Filing and Paying Each Quarter

You report and pay SUI quarterly on Form NYS-45, the Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return. The same form handles state income tax withholding.¹¹ The 2026 quarterly deadlines:¹²

Q1 (January–March): April 30
Q2 (April–June): July 31
Q3 (July–September): October 31
Q4 (October–December): January 31

When a due date falls on a weekend or legal holiday, it moves to the next business day. No extensions are available. Returns and payments go through the NYS Employer Online Services portal, with payment by ACH debit from a business account.

What a Late Filing Costs

Missing an NYS-45 deadline is expensive. The base penalty for a return not received by the due date is the greater of $1,000 or $50 per employee shown on your last filed return, capped at $10,000 per quarter.¹³

If you file within 30 days of receiving a certified notice and had a delinquent quarter in the past year, the penalty may instead be 5% of the withholding tax plus 5% of the UI contributions on the return, with an added 5% for each additional month the return stays outstanding, up to 25%. Returns filed more than 30 days after the certified notice face the harsher of the per-employee penalty or the percentage calculation.¹³

Late contributions can also raise your UI rate in future years, so a missed quarter keeps costing you long after the penalty itself is paid.¹⁴

1
New York State Department of Labor. Unemployment Insurance Rate Information
2
New York State Department of Labor. Employer Contribution Rate Table
3
New York State Senate. New York Labor Code 581-B – Contributions to the Re-Employment Service Fund
4
New York State Senate. New York Labor Law 581 – Experience Rating
5
Department of Labor. UI Rates and Employer Account Percentages
6
Department of Labor. Your Notice of Experience Rating Charges
7
Department of Labor. Voluntary Contributions Worksheet
8
New York State Department of Labor. NYS-45 Quarterly Reporting
9
Internal Revenue Service. Topic No. 759, Form 940, Employers Annual Federal Unemployment Tax Act Tax Return
10
Department of Labor. Transfers of Business and Your Contribution Rate
11
New York State Department of Taxation and Finance. Form NYS-45, Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return
12
New York State Department of Taxation and Finance. Withholding Tax Due Dates
13
Department of Labor. Failure to File Penalties
14
Department of Labor. NYS-45 Quarterly Reporting