As of 2015 the unemployment tax rate in California for new employers is 3.4 percent for two to three years; 6.2 percent is the highest rate for all employers, according to California's Employment Development Department. Employers do not pay more than $434 per employee per calendar year.
Employers pay unemployment insurance taxes on the first $7,000 in wages they pay each employee annually. Each December the state informs employers of their unemployment insurance rates and taxable wage levels, according to California's Employment Development Department. An employer that purchases an existing business is able to use the seller's unemployment tax rate. States use unemployment taxes to pay employees who are temporarily out of work due to circumstances the employees did not create.