Employers have to pay unemployment tax on top of the matching FICA payroll tax. There is a state unemployment tax, and a federal unemployment tax.
The federal unemployment tax is paid at least annually, and reported annually on a federal form 940. This is paid on the first $7,000 in compensation paid to each employee.
The state unemployment tax is paid quarterly, and reported quarterly on a state form UCT-6. This is paid on the first $7,000 in compensation paid to each employee. The tax rate varies on several factors including: length of time in business, employer claims history, and the state’s unemployment fund strength.