TWC Unemployment Insurance Tax Rates for 2022

Dear Employer:

The Texas Workforce Commission (TWC) contractor inadvertently selected the incorrect insert to this year’s tax rate notice. Some of you may have received an incorrect insert. This is the correct insert.

On November 23, 2021, TWC set unemployment insurance (UI) tax rates for 2022 at a stable level to avoid burdening Texas businesses with a significant increase of taxes resulting from pandemic-related closures outside of their control. This action is a result of the statutory authority of the Commission and was supported by funding from Senate Bill 8 (SB 8), passed during the 3rd Special Session of the 87th Texas Legislature and signed into law by Governor Abbott.

Employer-paid UI taxes replenish the Texas Unemployment Compensation Trust Fund, which provides temporary income for workers who lose their jobs through no fault of their own. Each employer’s UI tax rate is unique, tied to unemployment benefits paid to former employees. Absent SB 8 and the Commission’s action, most Texas employers would have seen significant increases in their tax obligation for 2022.

The Commission set the state’s UI replenishment tax rate to 0.20 percent, and the deficit tax rate to 0.0 percent. The Obligation Assessment was set to 0.01 percent to ensure that any federal interest due on Title XII loans were covered.

The components of your 2022 tax rate are:

• The general tax – based on claims against your account. If TWC has paid benefits to former employees who were laid off or separated through no fault of their own in the past three years, you will pay the general tax.
• The replenishment tax – charged to all experience rated employers to cover unemployment claims not charged to a specific employer. This tax tends to rise following economic downturns when claims increase and businesses close. This tax is set to 0.20 percent.
• The obligation assessment – to collect the amount needed to repay interest due from Title XII loans. This tax is set to 0.01 percent.
• The employment and training investment assessment – a flat tax of 0.1 percent, paid by all employers. By law, the Replenishment Tax Rate is reduced by the same amount so there is no increase in your tax rate due to this assessment.

At TWC, we work hard to minimize your unemployment insurance costs. In addition to lowering the tax burden, TWC is taking an aggressive approach to eliminate fraud, waste, and abuse of all kinds in the programs the agency administers. By reporting new hires immediately to the state Attorney General’s office, responding promptly to notices when a former employee applies for unemployment benefits, and responding to earnings information requests on claimants, you can help us avoid overpayments and fraud which costs all employers.

TWC works closely with local workforce development boards across Texas to fill job openings with qualified unemployed workers, and we fund training to upgrade the skills of workers to better match area employers’ needs.  TWC also works closely with economic development organizations to support existing Texas companies and to bring new business to the state.  We pledge our continued efforts in helping to keep taxes as low as possible in order to promote a thriving Texas economy.