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Important: Update Your State Unemployment Rate in QuickBooks For 2105

Posted by Shawn McCadden on Sun, Dec 28,2014 @ 05:30 AM

How to Update Your State Unemployment Rate in QuickBooks for 2015

QuickBooks Help for Contractors



For those of you running payroll through QuickBooks, it’s important to be sure that you start creating paychecks in 2015 using the correct state unemployment rate.  Although QuickBooks is capable of correcting miscalculated numbers if you accidentally neglect to update the rate prior to running payroll in the new year, it’s cleaner to be sure it’s correct right from the start.

Why is this important?

Because this rate is specific to your company rather than being a state-wide rate, QuickBooks is unable to automatically correct this rate via a payroll download. That’s why you need to make the adjustment manually.

You should soon (or may have already) received notification from your state department of labor. In some states, this form can be somewhat confusing since there are multiple figures. Often, clients aren’t sure which rate to use or where to enter it in QuickBooks.

Where to enter in QuickBook

  1. Click Lists ⇒ Payroll Item List.
  2. Scroll down the list to find and select your state unemployment item. QuickBooks usually names it using the 2-letter state abbreviation followed by Unemployment Company (as in ME – Unemployment Company).
  3. Double-click to edit and click Next twice to bring you to the Company tax rates screen.
  4. If you make the change prior to 1/1/15, you will see your 2014 rates by quarter and will need to enter the new rate in the box at the bottom called Year 2015     For 1/1 – 3/31. If you wait until after 1/1/15 (but before creating any 2015 paychecks), you will be able to enter the rate into the fields for the four quarters.
  5. Click Next until you get to the screen with Finish on it. Click Finish and you’re done.


QuickBooks Tips for contractors

What to enter in QuickBooks

Use the rate you received from the state. Be careful since states that have multiple taxes that are “grouped” may report the individual taxes and then the total amount. If QuickBooks calculates the taxes separately, you must enter the tax rate for unemployment without accidentally entering a rate that reflects a combined rate for unemployment and something else.

Example: In Maine we have an additional Competitive Skills Scholarship Fund (CSSF) tax that is reported and paid along with unemployment. The rate update form in Maine provides the information broken out as follows:

  • 2015  Final Unemployment Contribution Rate
  • 2015 CSSF Assessment Rate
  • Total Combined Assessment Rate for 2015

Because QuickBooks already tracks the CSSF rate separately, if your company were in Maine, you would need to enter the 2015 Final Unemployment Contribution Rate, not the Total Combined Assessment Rate.

For example, for 2015 my rates are as follows:

  • 2015  Final Unemployment Contribution Rate = 1.54%
  • 2015 CSSF Assessment Rate = .06%
  • Total Combined Assessment Rate for 2015 = 1.60%

I will be using the 1.54% rate.

I hope that helps!

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the co-author of A Simple Guide to Turning a Profit as a Contractor.   


Topics: Labor Costs, Guest Blogs, QuickBooks Related