What are Unemployment Taxes?
The Virginia Unemployment Compensation Act established Virginia’s State Unemployment Insurance (SUI). And you can think of it like insurance, we pool our resources together to protect ourselves when unemployment hits.
Employers must contribute to the state unemployment fund as mandated by the Virginia Employment Commission (VEC). This tax is levied on employers, not their employees. So workers cannot have state unemployment tax withheld from their paychecks.
What are the State’s Unemployment Insurance (SUI) liability criteria?
You must pay into the state’s unemployment fund if you have one or more employees working for at least 20 weeks within one calendar year. Or if you pay at least $1,500 in wages during a quarter.
What are the Compliance Rules for Employers?
- First, you must register with the VEC.
You must register with the Virginia Employment Commission within 10 days of meeting the SUI liability Criteria.
- You must file a Quarterly Tax Report (Form VEC-FC-20)
You must pay these taxes using the VEC’s online portal. You must do so by the last day of the month following each calendar quarter. (That’s April 30, July 31, October 31, or January 31.)
- Then the VEC issues you an annual Tax Rate Notice.
This assigned your tax rate for the following year. It can range from 0.1% to 6.2%.
- Always maintain accurate records to protect yourself.
Keep your employment and wage records on file for at least 4 years.
So, how can small Virginia employers comply with unemployment taxes?
If you don’t pay unemployment taxes, then your balance will incur interest and penalty fees. So stay compliant with payroll software built for you.
