Employers currently pay 6.2% on the first $7,000 of wages paid annually to each employee. The 6.2% is made up of two parts. A permanent rate of 6% and a .2% temporary surtax. The temporary surtax has been in effect since 1976 when it was first enacted. The most current legislation has it expiring July 1, 2011, which would mean the first $7,000 of wages paid in 2011 for each employee through June 30, 2011 would be taxed at 6.2% and after that only taxed at 6%. Federal unemployment reports are due January 31, 2012 but quarterly payments for unemployment tax over $500 are due each quarter. So in typical IRS fashion the surtax could expire and be reenacted sometime before the end of the year. In fact they could retroactively reinstate it so that employers submit 6% during 3rd & 4th quarter but when they go to file the annual report actually have to pay 6.2%. When questioned on this they assure us if that happens there will be some mechanism in place for employers to avoid a penalty.
I thought it was confusing enough to have two rates for Social Security tax this year. Remember for 2011 employees pay 4.2% Social Security tax and employers pay 6.2%. Now they are making the relatively easy federal unemployment tax confusing. The confusion does serve to drive home the point that business owners really need to make sure they have an accountant helping them through the muddy waters of payroll tax.