What is SUI?

SUI stands for State Unemployment Insurance, a payroll tax employers pay to fund unemployment benefits for workers who lose their jobs. Each state administers its own SUI program, with its own tax rates, wage bases, and eligibility requirements. Employers register with their state’s unemployment agency and pay SUI taxes based on their payroll and experience rating. This tax is what funds the temporary financial assistance unemployed workers receive while they search for new employment.

SUI taxes show up on employer payroll records as a separate line item, distinct from federal unemployment taxes and other payroll obligations. The rate varies by employer based on their history of unemployment claims, with new employers generally starting at a standard rate. HR departments need to keep SUI reporting accurate, since errors can affect future tax rates and compliance.