Update the State Unemployment Rate and Effective Date

At the beginning of each year, state unemployment agencies reassess the state unemployment insurance rate that is required to use for the upcoming year. This rate is based on the employer's experience rate for former employees who claim unemployment and is specific to the payroll user's company. If the rate has changed for the year, employer either receives a notice from the agency or is expected to check the payroll user's company account on-line with the agency. Accurate rates and deposit frequencies will avoid tax notices, penalties and interest for late or incorrectly paid taxes.

 

When updating the Unemployment tax rate in NetSuite, the Effective Date automatically defaults to the current date. The user needs to manually edit the effective date or use the calendar icon to properly reflect the new rates.

 

To change the rate using the current or today's date as the Effective Date:

1.   Navigate to Setup > Payroll > Set Up Payroll > Taxes     

2.   Change the rate under the Rate column next to the applicable tax item.  Enter the rates as decimals and not percentages. For example, if the rate on the tax notice is 7.4%, enter the rate as 0.074 on the field.

Note: the Effective Date automatically changes to today's date.

3.   Click the calendar icon and select today's date.

Note: If 3rd step is missed, the rate reverts back to the old rate upon saving.

 

 

To change the rate using a prior or past Effective Date:

1.   Navigate to Setup > Payroll > Set Up Payroll > Taxes     

2.   Change the rate under the Rate column next to the applicable tax item. .  Enter the rates as decimals and not percentages. For example, if the rate on the tax notice is 7.4%, enter the rate as 0.074 on the field.

Note: the Effective Date automatically changes to today's date.

3.   Click the calendar icon and select the correct date.

      Note: If 3rd step is missed, the rate reverts back to the old rate upon saving.

 

After changing the rate and effective date, sync the updates done to the payroll tax engine through the Update Payroll Information screen
a. Navigate to Setup > Payroll > Update Payroll Information
b. If you have a NetSuite OneWorld account, select a subsidiary from the dropdown list in the Subsidiary field
c. Click the Agree checkbox
d. Click Commit Updates
e. Navigate to the To Resolve tab to check for any errors


Double check the rate if it is still showing the correct rate after you updated the Payroll Information. Navigate to Setup > Payroll > Set Up Payroll > Taxes.

 

Notes:

1. NetSuite accepts past and current dates.  For a future-dated effective date, the rate is entered into the NetSuite Premier Payroll system on or after the date itself.

2. For Premier Payroll users, kindly forward the Tax Notice to Premier Payroll Service through NetSuite Customer Support.

3. The consequences of not making these changes timely can result in penalties and interest for which payroll user is responsible. 

4. See also Video Change State Unemployment/ Local Tax Rates (SuiteAnswers ID 31267).