Everything employers need to know about paying Georgia unemployment insurance fees.
If your small company employs people in Georgia, you must pay the Georgia unemployment insurance (UI) levy. The UI tax pays for unemployment insurance programs for qualifying workers. In Georgia, the state unemployment insurance levy is simply one of numerous taxes that companies must pay. Other major employer taxes not mentioned here include the federal unemployment insurance tax, as well as state and federal withholding taxes.
Varied states have different UI tax policies and rates. Here are the fundamental guidelines for Georgia’s UI tax.
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Become a member of the Department of Labor.
As a Georgia employer, you must open a Georgia UI tax account with the Georgia Department of Labor (GDOL). Form DOL-1A, Employer Status Report, is used to register for an account with the GDOL. On the GDOL website, click on the Forms and Publications page to obtain and download blank forms. If the GDOL concludes that your firm is liable for UI tax, it will give you a UI tax account number. (Most employers are required to pay the tax.) In Georgia, unlike in other states, there is presently no possibility to register for a UI tax account online. There is no cost to register your company with GDOL.
You will need a federal employer identification number to set up your Georgia UI tax account (EIN). You may get an EIN by visiting IRS.gov. In most cases, if you apply online, you will obtain your EIN very instantly.
Unemployment Insurance Tax Liability Regulations
As a Georgia for-profit employer, you are typically obligated to pay state unemployment taxes if you fulfill any of the following conditions:
If your total gross payroll for any calendar quarter is $1,500 or more, you employ at least one person, whether the same person is employed each day or some portion of a day in 20 different calendar weeks, whether or not the weeks are consecutive, you acquire another business, or substantially all (90% or more) of the assets of another business, that was liable for UI taxes, or you are liable for federal unemployment taxes under the Federal Unemployment Tax Act (FUTA).
The first three things are largely the same principles that apply under FUTA for federal responsibility. As a result, if your company is subject to FUTA, it is also subject to state UI taxes, and vice versa. Different restrictions apply to agricultural (farm) workers, domestic (in-home) workers, and employees of certain (but not all) non-profit organizations, which are not included here.
One piece of good news is that state UI tax payments are often deductible from FUTA taxes.
Wage Structure and Tax Rates
Each employee’s salaries are subject to UI tax up to a certain yearly limit. In recent years, the taxable salary base in Georgia has remained steady at $9,500. However, the quantity might alter at any time.
The state UI tax rate for new employers might also alter from year to year. The rate has been 2.7% in previous years. That rate is usually valid for at least 36 months. Based on a “experience rating,” established employers are liable to a lower or higher rate than new firms. This includes, among other things, whether your company has ever had workers file claims for state unemployment benefits.
Submit UI Tax Reports and Payments Quarterly
UI tax reports and payments are required in Georgia at the end of the month after the conclusion of each calendar quarter. To put it another way:
You have the option of filing your reports and payments online or on paper. Reports may also be filed on magnetic media, such as CDs; however, that option is not discussed here. Large companies (those with 100 or more workers) must submit electronically or on magnetic media.
To file online, go to the GDOL website and choose Online Services. There are links to submit quarterly reports and make payments there. Online payments may be made using credit/debit cards, e-checks via a third-party vendor (for a charge), or Electronic Funds Transfer (EFT). Use Form DOL-4N, Employer’s Quarterly Tax and Wage Report, to file on paper. Blank forms may be downloaded from the GDOL website’s Forms and Publications area.
Even if you do not pay employees during a given quarter, you must submit reports. If you do not file, you will face a penalty.
Make a Public Notice (Poster)
You must display a notification (poster) about state unemployment claims in areas where workers may easily see it. The poster explains when an employee may be eligible for unemployment benefits and how to make an unemployment claim. From the Forms and Publications part of the GDOL website, you may download a notification that satisfies all legal requirements (Form DOL-810).
Employees should not be misclassified as independent contractors.
Employers that hire independent contractors rather than employees are exempt from the UI tax. It is critical, however, that you should not misclassify an employee as an independent contractor. If you misclassify an employee, you may face penalties or fines.
Using Payroll Service Providers
You may decide that it is easier to delegate payroll obligations, including UI taxes, to an outside payroll agency. If this is the case, bear in mind that your company, or even you personally, may be held directly liable for errors made by an outside payroll firm.