Who Pays for Unemployment Benefits in California?

California employers pay a state unemployment tax that covers unemployment benefits. Each employer pays these taxes, which are determined on an annual basis.

Unemployment benefits are provided to employees on a temporary basis as long as the employees were terminated through no fault of their own. During the year, employers pay into this tax, with the maximum tax amount topping out at $434 dollars per year, as of 2014. New employers pay less taxes for the first 2 to 3 years than more established employers pay. Employers are generally not reimbursed for these taxes, although some nonprofit and government employers may be eligible for reimbursement.