Understanding Unemployment Insurance

Setting up unemployment insurance rates enables you to define state unemployment insurance and state disability insurance premiums that a company pays to the Federal government. You enter this information using the Unemployment Insurance Rate Revisions program (P079221). These records are stored in the F069226 table. When you set up and use these rates, they override the employee-paid tax rates provided by Quantum for Payroll Tax.

You must set up tax type C for any state whose unemployment insurance rate differs from the federal rate. If you do not set up state-specific information, the system uses the default federal rate it retrieves from Quantum.

You must also set up tax types GM, G1, G2, HM, H1, and H2 to calculate employee- and employer-paid state miscellaneous taxes. Contact local or federal taxing authorities for more information about tax requirements and reporting.

The system calculates unemployment insurance amounts for each state in which an employee works during a payroll cycle. The calculations differ depending upon whether state-specific information exists for tax type C.