Florida’s New Unemployment Tax Rate

The State Unemployment Tax Act, or SUTA, institutes a payroll tax rate that Florida businesses and employers are required to pay the state and federal government. This tax is primarily used to provide aid and relief to those who have filed for unemployment.

Unemployment taxes vary from business to business depending on their rate of layoffs. The minimum tax rate in Florida previously was 0.1% or $7 per employee, and the maximum rate is 5.4% or $378 per employee.

The minimum tax rate is typically paid by businesses that have not had to lay off any employees in the past three years.

However, given the COVID-19 pandemic and the mass unemployment crisis in Florida, the Florida Chamber of Commerce has announced that the minimum unemployment tax rate will now be .29% effective Jan. 1.

This means that employers who previously only needed to pay the minimum rate of $7 per employee will soon need to pay $20.30 per employee.  The maximum rate will remain unchanged, which is still 5.4% or $378 per employee.

Reactions to this seemed melancholy but understanding as business owners recognize the need for a raise in tax rates, especially considering how hard the COVID-19 pandemic has hit Florida on an economic level.

“It’s been a tough year already with coronavirus, but we have to do what we have to do,” says Chris Blauvelt, a local restaurant owner in downtown Fort Myers. “We have to pay our taxes, and we have to support our community.”

On the other hand, many are worried about how this unplanned policy change will impact employers, mainly those who are noticeably struggling during the pandemic.

“It’s going to be significant for some employers that haven’t planned… Employers are already hurting due to the pandemic,” says Carolyn Johnson,  Director of Business, Economic Development and Innovation Policy at the Florida Chamber of Commerce.

However, it is important to note that this is not the first time that unemployment taxes have heavily increased. During the Great Recession in 2009, lawmakers had planned for taxes to increase from $8.40 per employee to a whopping $130 per employee, although they were later pushed to extend the time period of slightly increased taxes instead of drastically increasing them in one year.

Florida has been known to have less than favorable unemployment benefits, and the pandemic has further added fuel to the fire. This new measure of unemployment taxes combined with other initiatives could indicate that Florida is making efforts to improve its program. 

The state’s Department of Economic Opportunity, or DEO, has paid up to $18.9 billion to over two million claimants. Additionally, the Florida Department of Economic Employment found that over 650,000 Floridians are unemployed.

Likewise, Governor DeSantis announced that Florida was awarded $28 million from the U.S. Department of Labor’s Disaster Recovery Dislocated Worker Grant to provide more relief to those affected by the pandemic, specifically the unemployed.

Those qualified to receive relief from the grant include dislocated workers, those who have been laid off during the COVID-19 pandemic, self-employed workers who have been unable to work during the pandemic, and those who have been unemployed since before the pandemic.

“I want to thank Governor Ron DeSantis for his leadership and for his steps to reopen the state so more Floridians can find gainful employment,” said Dane Eagle, Executive Director of the Florida Department of Economic Opportunity.

Finally, the DEO reported that Florida had lost more than one million jobs from February to April, but since then, the state has gained over half of those jobs back due to businesses being able to reopen, children going back to school, and the overall ease in COVID-19 restrictions.

While this is obviously good news, experts are warning that this trend might not be the light at the end of the tunnel just yet.

“Right now we see rapid gains in job growth and we see the unemployment rate dropping, but I wouldn’t put too much into a one- or two-month trend,” said Adrienne Johnston, chief of Workforce Statistics and Economic Research. 

Featured image: Ron DeSantis in 2017. Unmodified photo by Greg Skidmore used under a Creative Commons license. (

Check out other recent articles from the Florida Political Review here.      

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