What you pay unemployment taxes on

You pay unemployment taxes on your employees’ gross wages up to the taxable wage base. Wages include:

  1. The amount each employee was paid for working, whether paid as a fixed salary, hourly pay or overtime.
  2. When paid vacation or holidays, earnings are reportable.
  3. Tips reported by the employee.
  4. Bonuses or prizes.
  5. Non-cash payments, such as meals and lodging.

Wages do not include sick leave, allocated tips, jury-duty pay or death benefits.

Note: Even though you only pay unemployment taxes on the taxable wage base, you still must report all wages paid. Total wages are used to calculate unemployment benefit payments.

Relevant laws and rules

Wage laws | General wage definitions | Non-cash payments | Tips as wages