The Texas Workforce Commission (TWC) announced that the agency sent the wrong insert with the 2022 state unemployment insurance (SUI) tax rate notices, but the notices themselves are correct. Go here to see what information should have been inserted with the 2022 rate notices.

Employers can confirm their 2022 SUI tax rate notice information and view UI benefit chargeback and voluntary contribution information online via the TWC's Unemployment Tax Services (UTS) system by going here.

The TWC previously announced that the 2022 tax rates would be set at a stable level to avoid a significant increase over 2021.?This action is a result of the statutory authority of the TWC and was supported by funding from SB 8, passed during the 3rd 2021 Special Session of the legislature.

As a result of the TWC's modifications, employer total SUI tax rates continue to range from 0.31% to 6.31% for 2022, the same as for 2021.

A factor of the rate computation, the flat UI replenishment tax rate, increased to 0.20% for 2022, up from 0.18% for 2021. However, the unemployment obligation assessment rate, which will be used to cover any federal interest due as of September 30, 2022, went down to 0.01% from 0.03% for 2021. The TWC chose again for 2022 to not include a deficit tax rate factor.

SB 8 also authorized the appropriation of roughly $7.2 billion for deposit to the state's UI trust fund to pay off the state's federal UI trust fund loan and return the UI trust fund to a level to hold the 2022 tax rates steady. As of February 17, 2022, the federal Treasury Direct website shows a federal loan balance of zero.

2022 SUI wage base

The SUI taxable wage base remains at $9,000 for 2022 and the new employer rate remains at 2.7%.

Voluntary contributions resumed for 2022

Experience-rated employers may once again make a voluntary contribution to reduce their assigned 2022 SUI tax rate.

As provided for under Texas law and rules (UI law section 204.048, UI Rule section 815.119), experienced-rated employers may within 60 days of the mailing date of the rate notice make a voluntary payment equal to some or all of the UI benefit chargebacks for the period ended September 30 used in computing the employer's tax rate for the next year.

According to the TWC tax representative, experience-rated employers may make a voluntary contribution to reduce their assigned 2022 SUI tax rates by March 11, 2022.

In 2021, Governor Abbott temporarily suspended the ability of experience-rated employers to make voluntary contributions to potentially reduce their 2021 SUI tax rates. (EY Tax Alert2021-0911; 5-05- 2021; TWC COVID-19 website.)

2022 SUI tax rate computation

The 2022 Texas SUI experience tax rates consist of four components, as follows:

1. General tax rate. The general tax rate is calculated by dividing the benefit charges for three fiscal years ending the third quarter of 2021 by the same three years of taxable payroll and multiplying by a replenishment ratio of 1.38 for 2022 (up from 1.36 for 2021).
   Legislation (HB 7) enacted in 2021 excludes from the calculation of the replenishment ratio benefits paid and not effectively charged to an employer's account as a result of an order or proclamation by the governor declaring at least 50% of the state's counties to be in a state of disaster or emergency.
2. Replenishment tax rate. This is a flat tax paid by all employers to replenish the state's UI trust fund for one half of the UI benefits paid to claimants that were not charged to a specific employer's account. The replenishment tax rate for 2022 is 0.20% (up from 0.18% for 2021).
3. Unemployment obligation assessment (OA). The third component of the 2022 tax rate is the OA, which for 2022 is 0.01% (down from 0.03% for 2021). The purpose of OA is to collect the amounts needed to pay any federal interest due on the state's federal UI loan balance as of September 30, 2022. This tax will not be certified by Texas to the federal government as unemployment contributions and should not be used in calculating the federal unemployment tax credit on Form 940.
4. Employment and training investment assessment (ETA). This is a flat tax of 0.10% paid by employers to fund the Skills Development Fund. This tax is not certified by Texas to the federal government as unemployment contributions and should not be used in calculating the federal unemployment tax credit on the Form 940. The employment and training assessment is listed as a separate line item on the Texas Employer's Quarterly Tax Report.

As in 2021, the TWC is not charging employers a deficit tax in 2022.

The 2022 Texas total SUI tax rate shown on the rate notice equals the general tax rate + the replenishment tax rate + the unemployment obligation assessment + the employment and training investment assessment, resulting in a minimum computed SUI tax rate of 0.31% and a maximum computed SUI tax rate of 6.31%, the same range as was in effect for 2021.

Further information on Texas unemployment taxes is available here.

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