How to Use the New York UI Cost Impact Calculator

This calculator helps New York employers understand and plan for unemployment insurance (UI) costs. It includes two components—Claim Exposure and Payroll Impact—that answer different but related questions about UI liability.

Claim Exposure

The Claim Exposure tab estimates the potential cost to your business if a former employee collects unemployment benefits. By entering the employee’s weekly wage and the expected number of weeks of benefits, the calculator projects the total potential charges to your UI account.

This estimate helps employers appreciate the financial impact of layoffs, terminations, or seasonal workforce reductions. A single claim can significantly affect your UI account balance and, over time, your experience rating. While actual costs depend on eligibility rulings and the exact duration of benefits, this tool provides a clear, practical sense of potential exposure.

Payroll Impact

The Payroll tab models the cost of UI contributions based on New York’s taxable wage base and your UI contribution rate. For 2025, the wage base is $12,800, and it will increase to $13,000 in 2026. Employers pay UI tax on wages up to this cap per employee each year; earnings beyond that threshold are not taxed for UI purposes.

By comparing your current rate with a projected rate or a future wage base, the calculator shows the difference in annual liability. This helps with budgeting, forecasting, and understanding how New York Department of Labor updates will affect your payroll costs.

Why This Matters

Unemployment insurance costs are shaped by both state policy (such as annual wage base adjustments) and your individual claims history. Using this calculator helps New York employers anticipate expenses, evaluate the real cost of employment decisions, and take proactive steps to manage claims and payroll budgets effectively.

Frequently Asked Questions About New York Unemployment Insurance

What is the New York UI taxable wage base?
The taxable wage base is the maximum amount of each employee’s annual wages subject to unemployment insurance contributions. For 2025, the wage base is $12,800, and it will rise to $13,000 in 2026. Once an employee’s earnings exceed that amount, the employer does not owe additional UI contributions for that employee during the year.

How is the employer UI contribution rate determined?
Each year, the New York State Department of Labor assigns employers a UI contribution rate. The rate is based on the state’s overall unemployment trust fund health and the employer’s experience rating, which reflects the number and size of unemployment claims charged to that employer’s account. Businesses with fewer terminations generally receive lower rates.

How do unemployment claims affect my future costs?
When former employees collect UI benefits, those benefits are charged to the employer’s account. These charges increase the employer’s experience rating, which can raise UI contribution rates in future years. That’s why monitoring claim exposure is as important as tracking payroll contributions.

Can employers reduce their unemployment insurance costs?
While employers cannot change the taxable wage base or statewide rate schedules, they can influence their experience rating. Strategies include improving retention, using progressive discipline to reduce disputes, documenting separations carefully to contest ineligible claims, and considering alternatives to layoffs when workforce reductions are necessary.

Why use a UI cost calculator?
A calculator allows employers to see both short-term payroll impacts and long-term claim exposure in one place. By modeling different scenarios, businesses can better understand the financial implications of turnover, policy changes, and workforce planning decisions.