Pennsylvania employers pay some of the highest unemployment insurance taxes in the nation, according to a new study by the Tax Foundation. Tax rates vary based on the frequency of layoffs. If a company frequently lays off employees, their unemployment insurance taxes will be at or near the maximum rate. But if a company rarely lays off employees, their tax rate will be close to the minimum rate.
Nationally, Pennsylvania has the highest minimum employer tax rate, which ranges from zero to 2.7 percent. The state’s maximum employer tax is the fourth-highest in the nation.
The study also found states raise unemployment taxes on employers during times of high unemployment and lower them during economic booms. This pattern makes it more difficult for businesses to hire when unemployment is high and easier when jobs are plentiful.