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Who is required to pay unemployment insurance taxes?

Unemployment insurance taxes are required to be paid by an employer that has been determined by the UIA to be a liable employer. (Before being determined to be a liable employer, a company is known as an employing unit.)

Generally, a liable employer is an employing unit that either (1) employed 1 or more employees in each of any 20 different weeks in a calendar year (i.e., a January 1 through December 31 year); or (2) paid $1,000 or more in payroll in a calendar year to employees covered by unemployment insurance; or (3) acquired the trade, organization (i.e., all employees), or business, or at least 75% of the assets of a liable employer. (This last situation is called successorship and is discussed in more detail later in this booklet.)


The requirements are different for an employer of agricultural or domestic workers. An employer that pays a total of $1,000 or more, in cash, to all its domestic employees (such as housekeepers or babysitters) in any calendar quarter in the current or preceding year, is a liable domestic employer.


An employer that (1) pays a total of $20,000 or more, in cash, to all its agricultural workers in a calendar quarter, or (2) employs 10 or more agricultural workers in at least 20 different weeks, in the current or preceding year, is a liable employer. Agricultural employees furnished by a crew leader are employees of the crew leader. Agricultural workers include, in general, those who raise food or horticultural crops and those who raise or tend animals for use as a product source.


If you are not now registered with the UIA as an employer, and you believe you may fall into one of the categories described above, you should request the form 518, Michigan Business Tax Registration Booklet. Address your request to the UIA Tax Office, 3024 West Grand Blvd., Detroit, Michigan 48202. You may also get the booklet here.

Related Content
 •  Purpose of this overview
 •  What is Unemployment Insurance?
 •  Employers pay either contributions (taxes) or reimbursements
 •  Which employees are covered by Unemployment Insurance?
 •  How much is the Unemployment Insurance Tax?
 •  How is the unemployment tax rate computed?
 •  Chargeable Benefits Component (CBC)
 •  Nonchargeable Benefits Component(NBC)
 •  Account Building Component (ABC)
 •  Across-the-Board Tax Reduction
 •  What is the tax rate when a new owner acquires an existing business, or businesses merge?
 •  Unemployment taxes under the Federal Unemployment Tax Act (FUTA)
 •  What happens to state and federal unemployment tax payments?
 •  Notification of state unemployment tax
 •  How and when to pay your unemployment taxes
 •  Effect of Missing Tax Report(s)
 •  Protest/Appeal Rights
 •  Tax Office Contacts
 •  Sample calculations
 •  What address should employers use to submit their tax reports and payments?
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