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Unemployment Taxes in Texas

Discussion in 'Business Operations' started by DFW Area Landscaper, Dec 16, 2003.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    I just spoke with someone from the Texas Workforce Commission about unemployment rates.

    If you're new in business, the unemployment tax is automatically 2.7% on the first $9,000 per employee per year. There is no tax on wages paid beyond $9,000 per year to a single employee. The rates are adjusted every so often, once a year I think, and they can be as low as 0.67% and as high as 8.44%.

    I explained that I am in the landscaping business and that I have plenty of work late March through Thanksgiving, but then I don't have much work at all. He said that my employees may be eligible for unemployment benefits at that time of year.

    I also asked him about me. Since my business is set up as an LLC, I am actually an employee of the LLC. If I work my payroll just right, I think I'll be eligible for unemployment benefits too. I may need to talk with the accountant about this one.

    If someone in Texas has experience with this, and I don't understand this stuff correctly, please let me know what I'm missing. But it looks to me like my employees and I could possibly get a lot more in unemployment benefits every year than the LLC would pay in.

    DFW Area Landscaper
  2. TRex

    TRex LawnSite Senior Member
    from DFW ,TX
    Messages: 487

    Do you think that the 8.44% tax might kind of equal things out in the end. I do not know much about unemployment because I have never drawn it. I do not know you situaton either, so I guess your accountant would know best in this situation.
  3. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    I am afraid of what mine is going to go up here in Michigan. I am currently at 2.7%, but this winter was the first time that I had someone draw unemployment from me. I am worried at what the rate will jump up to. I can't imagine paying in 8.44%
  4. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    +++++Do you think that the 8.44% tax might kind of equal things out in the end.++++++

    I doubt it, at least not on a two man crew...myself and one employee.

    It's only a tax on the first $9,000 worth of wages for each employee. Since I only have one employee, other than myself, the 8.44% tax would only be applied to the first $18,000 in wages. (This assumes no turnover with my employee.) The premiums would only be $1,519 per year for the two of us.

    I'm not 100% sure we'd qualify, but I do know that the maximum benefit is $319 per week. I think I would qualify for that, but I'm not 100% certain. If I qualify, I could probably collect around $4K per year. My employee could collect too, though probably not as much since he won't be earning as much during the growing season.

    If I'm understanding this correctly, between myself and my employee, we could collect quite a bit more than our employer (the LLC) would pay in each year.

    DFW Area Landscaper

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