Learn how to change your State Unemployment Insurance (SUI) rate in QuickBooks Desktop Basic, Enhanced, or Standard Payroll.
The State Unemployment Insurance rate is issued by your state. Most states update their SUI rates in the beginning of the year, while others, such as New Jersey, Vermont and Tennessee, update their rates in the third quarter of the year.
We explain SUI rates below.
What you need to know about SUI rate
- Your SUI rate is unique to your business and issued by your state.
- The rate is not part of the tax table update and critical that you enter your current rate in QuickBooks Desktop
- SUI is paid only by the employer, unless you are in a state that requires employees to contribute
- The SUI wage base limit is updated by the tax table according to your state's requirements, and cannot be manually changed
If you have received a rate change notice from your state, see How to Read SUI rate change notifications.
If you use Assisted Payroll, see SUI rate change for Assisted Payroll.
The majority of states attach a surcharge or assessment to State Unemployment.
To ensure that you enter the correct percentage rate for the SUI portion:
- Compare the breakdown of rate on your notice with a sample copy for your stateSee Read SUI rate change notifications
- if your state attaches an assessment or surcharge item, update the rate for that payroll item (as needed) in QuickBooks Desktop
Change the SUI rate
To change your SUI rate in QuickBooks Desktop:
- From the Lists menu, select Payroll Item List.
- Double-click the State Unemployment Tax item.This item is typically named [state abbreviation] - Unemployment Company.
- Select Next, and select Next for the Company tax rates for [year], and enter the correct rates for each quarter.In the later half of the year, fields appear on the Company tax rates screen that allow you to add rates for the first quarter of the following year.
- If the Payroll Tax Rate Change Warning appear, indicating you are changing the tax rate for the current quarter, select Continue.Your SUI rates are updated.
- Select Next once and clear any compensation items that are not subject to your state's unemployment tax.Check with your state's unemployment department for more details.
- Select Finish.
SUI rate change in the current or prior quarter
If you change the SUI rate for the current quarter or in a prior quarter, QuickBooks Desktop does not automatically adjust the tax amounts collected for any employees who have reached the wage limit before the rate change.
To adjust the tax amount collected for SUI, you must make a manual tax amount adjustment for each affected employee for each quarter affected.
To adjust SUI wage bases or amounts reported for your employees, first create a Payroll report to determine these numbers.
To create a Payroll report:
- From the Reports menu, select Employees & Payroll, and select Payroll Item Detail.
- Set the date to view each affected quarter.
- Select Customize Report button and select the following:
- Source Name
- Payroll Item
- Wage Base
- Select the Filters tab, select Payroll Item, and select your State Unemployment item.
- Select Ok.
- Find the Total wage base column for the SUI and multiply it by your current rate.
- Match results with the amount calculated.
If the report indicates that you have employees who are over or under collected for SUI, you can create correcting positive or negative liability adjustment for the affected employee and affected quarter.
For more information, see Entering wage base and tax adjustment to correct employee's quarter (qtd) or year to date (ytd) total.
More information about State Unemployment Taxes
For more information about State Unemployment Taxes, notices, and rates, see the following articles: