SUI (State Unemployment Insurance)

What is SUI taxes?

SUI, as it’s often referred to, stands for State Unemployment Insurance and is employer-funded. SUI exists to help employees who have left or lost a job (for many reasons).

SUI tax offers these employees short term benefits to help them through their tough time.

It’s usual for an employee to receive paychecks during a specified period or until they have found new employment.

Who Is Required to Pay Unemployment Tax?

While there are different laws depending on the state regarding additional money to be withheld for SUI, as well as different tax rates state by state, it’s the employers who pay state unemployment taxes.

As a general rule, state unemployment taxes are not withheld from employees’ wages.

In most cases, the more former employees that an employer has, the higher their SUI rate will be.

Who Qualifies for Unemployment Benefits?

Any employee who is fired for misconduct or quits their job is not eligible for State Unemployment Insurance. There are other scenarios in which employees qualify.

Some of these are:

  • Being fired for any other reason than misconduct
  • Having to leave employment due to ill health or some personal reasons
  • Being laid off by an employer – this is usually down to the lack of available work

It is also worth noting that each state sets its own guidelines for who qualifies for unemployment benefits, so be sure to check your state’s particular guidelines.


See our full list of over 50 Small Business Terms here


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