Reimbursable employers

Reimbursable employers do not pay unemployment taxes. Instead, they pay us back for the benefits we pay to their separated employees.

If you are a reimbursable employer, you still need to file quarterly reports. However, you do not need to submit payments with them.

Instead, we bill you quarterly if there are any benefit charges to your account, even if you were not the former employee's last employer. You also are not eligible to remove benefit charges from your account.

If we determine we overpaid your former employee, we will issue you a credit when we recover the money.

Reimbursable employer eligibility

To be a reimbursable employer, you must be exempt from the Federal Unemployment Tax Act (FUTA). State, federal and military employers must be reimbursable.

Eligible reimbursable employers can be:

  • 501(c)(3) nonprofit organizations.
  • Government entities and their political subdivisions.
  • Federally recognized Native American Tribes.

Local government accounts and subdivisions can choose to be taxable or reimbursable. So can 501(c)(3) nonprofit agencies. Nonprofit organizations need to give us a copy of its section 501(c)(3) letter.

Choosing a tax payment method

If you want to change your tax payment method, you need to submit the choice of tax payment method (PDF, 157KB) form to us. This form is how you choose to be a reimbursable or taxable employer. We need to receive it at least 30 days before the beginning of any calendar year.

When completed, sign and submit it by email, mail or fax:

  • Email: uifiles@esd.wa.gov.
  • Mail:
    Employment Security Department
    Registration Unit
    P.O. Box 9046
    Olympia, WA 98507-9046
  • Fax: 800-794-7657.

If you choose the reimbursable method, you need to use that method for at least 2 calendar years. After that, your account will remain reimbursable until either:

  • You ask to change to the taxable method.
  • We convert your account due to delinquent payments.

Bond requirements

You may need to post a surety bond or security deposit before we process your request to be a reimbursable employer. Not all employers need to do this. The exceptions are political subdivisions, nonprofit hospitals, colleges and universities.

If you are a new employer, we base your required bond's amount on your projected taxable payroll for the coming year. We multiply that by the industry average tax rate and round down the result.

If you are already a reimbursable employer, we base your required bond's amount on the individual wages of each employee for the previous 4 completed calendar quarters. We multiply that by the maximum taxable wage base for the coming year. We round down the result.

Billing for benefit charges

You will receive your benefit charging statements quarterly instead of monthly.

Tax payments are due to us 60 days following the end of the calendar quarter. For example, quarter 4 ended on Dec. 31, so quarterly bill payments are due on Feb. 28.

We bill reimbursable employers the quarter after we paid unemployment benefits. For example, we would bill you in April for benefits paid January through March. Your payment would be due by May 31.

Payment is due even if any of these are true:

  • You are protesting the benefits.
  • The employee has an overpayment.
  • You reported wages for exempt employees in error.

We will give you credit for an overpayment once your former employee has repaid it. If the employee has an overpayment but is eligible for a waiver, we will still charge you.

Look at an example of a reimbursable employer's billing statement (PDF, 1,237KB). You can see what each section means.

Switching to a taxable employer

You will need to submit a choice of tax payment method (PDF, 157KB) form.

If you switch from reimbursable to taxable:

A nonprofit organization that becomes taxable must remain taxable for 1 year. Local government agencies and political subdivisions must remain taxable for 2 years.

If you switch to taxable, former employees may still be receiving benefits from wages reported while you were reimbursable. We will continue to send you a Quarterly Reimbursable Billing Statement. And you will still need to pay for benefits paid to your former employees while also paying your quarterly taxes.