The Texas Workforce Commission (TWC) set unemployment insurance (UI) tax rates for 2022 at a stable level to avoid burdening Texas businesses with a significant increase of taxes resulting from pandemic-related closures outside of their control. This action is a result of the statutory authority of the Commission and was supported by funding from SB 8 (Nelson), passed during the 3rd Special Session of the 87th Texas Legislature and signed into law by Governor Abbott. The Commission set the state’s UI replenishment tax rate to 0.20 percent, and the deficit tax rate to 0.0 percent. The Obligation Assessment was set to 0.01 percent to ensure that any federal interest due on Title XII loans were covered.
Employer-paid UI taxes replenish the Texas Unemployment Compensation Trust Fund, which provides temporary income for workers who lose their jobs through no fault of their own. Each employer’s UI tax rate is unique, tied to unemployment benefits paid to former employees. Absent SB 8 and the Commission’s action, most Texas employers would have seen significant increases in their tax obligation for 2022.