TWC Sets Stable Employer Tax Rate to Promote Continued Business Recovery

Date: June 15, 2021

Media Contact: James Bernsen
Phone: 512-463-8556

Unemployment Insurance Tax rate for 2021 set at pre-pandemic level,
protecting Trust Fund solvency while reducing tax burden on Texas businesses

AUSTIN – The Texas Workforce Commission (TWC) used legislative authority to set unemployment insurance (UI) tax rates for 2021 at a stable level, consistent with 2020 rates, to avoid burdening Texas businesses with a significant increase of taxes resulting from pandemic-related closures outside of their control. 

“Texas employers continue to overcome the challenges of the past year and contribute to a strengthening economy,” said TWC Chairman Bryan Daniel.  “Today’s action on UI taxes enables businesses to better focus resources on innovating and expanding jobs available to Texas workers.”

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 today’s Commission action, most Texas employers would have seen significant increases in their tax obligation for 2021. 

“Texas workers are eager to get back to work and help move our economy forward,” said TWC Commissioner Representing Labor Julian Alvarez. “This decision to keep taxes low will encourage hiring, and expand opportunities for working Texans.”

The Commission set the state’s UI replenishment tax rate to 0.18 percent, and the deficit tax rate to 0.0 percent.  The Obligation Assessment was set to 0.03 percent to cover any federal interest due on Title XII loans due on September 30, 2021.  The combination of the replenishment tax and obligation assessment equals the 2020 replenishment tax rate of 0.21 percent.

“This decision gives stability and predictability to our UI tax structure,” said TWC Commissioner Representing Employers Aaron Demerson. “Texas employers and Business leaders look forward to that stability especially after a year of rampant uncertainty. This gives them the capacity they need to hire, expand and get Texas’ economy back on track.”

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The Texas Workforce Commission is a state agency dedicated to helping Texas employers, workers and communities prosper economically. For details on TWC and the services it offers in coordination with its network of local workforce development boards, call 512-463-8942 or visit www.texasworkforce.org. To receive notifications about TWC programs and services subscribe to our email updates.

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