Contributing employers covered under the Michigan Employment Security (MES) Act are required to pay unemployment insurance taxes on their employees’ wages. The taxable wage base is the amount of an employee’s wages that is taxed by the Unemployment Insurance Agency each calendar year and is payable by the employer.
What this means:
An employer is required to pay unemployment taxes based on their tax rate calculated by the UIA until an employee reaches the taxable wage limit. Typically, this amount is $9,000 unless you are in default with the UIA.
Due to the Trust Fund Balance falling below 2.5 Billion in 2020, the 2021 taxable wage base is $9,500 for all employers which means employers will need to pay taxes based on an additional $500 per employee. This is going to cause an increase in unemployment taxes owed for 2021 for most employers base on their tax rate.
We understand that unemployment rates and taxable wage limits can be really confusing. Please contact us if you have any questions. We also offer payroll services so we can take care of the payroll tax situations on your behalf.