What is Florida reemployment tax and do I have to pay it?

Florida reemployment tax is the state’s unemployment tax. Florida renamed it in 2012, but it works the same as the unemployment insurance tax you see in other states. Employers pay it so that former employees can collect benefits if they lose their jobs through no fault of their own. It is not withheld from employee paychecks. This comes entirely out of the employer’s pocket.

You become liable for this tax if you meet either of two thresholds. The first is paying $1,500 or more in total wages during any calendar quarter. The second is having at least one employee for any part of a day during 20 or more different calendar weeks in a year. Most businesses with even one part-time employee will hit one of these triggers fairly quickly.

Once you’re liable, you need to register with the Florida Department of Revenue. You can do this online through their website. After registration, you receive a reemployment tax account number and your assigned tax rate.

New employers in Florida typically receive a rate of 2.7%, though this can vary depending on your industry classification. After you’ve been in the system long enough to build a history, your rate adjusts based on your experience. If former employees file a lot of unemployment claims against your business, your rate goes up. If they don’t, your rate can drop significantly. Rates range from 0.1% to 5.4% depending on your claims history.

The tax only applies to the first $7,000 in wages per employee per year. Once you’ve paid an employee more than $7,000 in a calendar year, you stop owing reemployment tax on their additional wages. For a business with a few employees, the actual dollar amount is relatively small, but you still need to file quarterly returns and pay on time.

Quarterly returns are due by the end of the month following each quarter. First quarter is due April 30, second quarter July 31, third quarter October 31, and fourth quarter January 31. Late filings and late payments trigger penalties and interest that add up fast for something that shouldn’t cost much to begin with.

One common mistake is assuming that if you only use 1099 contractors, you don’t need to worry about this tax. That’s true as long as those workers genuinely qualify as independent contractors. Florida and the IRS both look at the actual working relationship, not just what you call it on paper. If your “contractors” are really functioning as employees, you could owe back reemployment taxes plus penalties.

If you’re running full-service payroll, reemployment tax filings are typically handled as part of the quarterly payroll tax process. The calculations, deposits, and filings happen alongside your federal payroll taxes so nothing gets missed.

For business owners new to Florida or hiring their first employees, getting payroll taxes right from the start saves a lot of headaches down the road. Our Tampa Bay bookkeeping and accounting team works with small businesses across the area to make sure registrations, filings, and payments are handled correctly so you can focus on running your business instead of tracking quarterly deadlines.