Page 286 - Essentials of Payroll: Management and Accounting

Unemployment Insurance
EXHIBIT 10.5 (CONTINUED)

New Employee Taxable
Employer Employer Withholding Wage
State Tax Rate Tax Rate Rate Limit Coverage
Utah 0.1%–8.1% (1) None $21,400 Any company paying
$140+ in wages
during any quarter of
current or preceding
year or that is
subject to FUTA
Vermont 0.4%–8.4% (1) None $8,000 Same as federal
Virginia 0%–6.2% 2.5% None $8,000 Same as federal
Washington 0.47%–5.6% (1) Optional $28,500 Any company with
1+ employees
during the year
West Virginia 1.5%–8.5% 2.7% None $8,000 Same as federal
Wisconsin 0%–9.75% 3.05% None $10,500 Same as federal
Wyoming 0.15%– (1) None $14,700 Any company with
8.71% 1+ employees
during the year
Note 1: Industry-based rate is applied for a new employer.

charged against the company, which will impact its experience rating
and therefore increase the amount of its contribution rate in the fol-
lowing year.
States have a preference for defining contractors as employees, since
an employer can then be required to pay unemployment taxes based on

the pay of these individuals. To determine the status of an employee
under a state unemployment insurance program, use some portion or all
of the so-called ABC test, which defines a person as a contractor only if:
• There is an absence of control by the company.
• Business conducted by the employee is substantially different
from that of the company, or is conducted away from its
premises.

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