State Unemployment Insurance (SUI) is a payroll tax that most employers are required to pay, but some farms and ranches may be exempt, either permanently or until they reach a certain payroll threshold.
Understanding whether you're exempt is important. Letting us know about your exemption status helps FarmRaise monitor your liability and support your compliance with state requirements.
Why Are Some Farms or Ranches Exempt?
State laws often recognize the unique nature of agricultural work. Because of this, some states offer full or partial SUI exemptions for farm employers.
Common Reasons for Exemption:
Small-scale farm operations: Farms with fewer employees or smaller payrolls may not meet the minimum threshold for SUI coverage.
Family labor: Wages paid to certain family members (e.g., children under a certain age or a spouse) may be exempt in many states.
Limited payroll amounts: Some states allow farms to remain exempt until their payroll exceeds a specific dollar threshold in a calendar quarter or year.
Types of Exemption
There are two main categories of exemption:
Always Exempt: Some farms never need to pay SUI, regardless of payroll or number of workers.
Conditionally Exempt (Threshold-Based): Other farms are exempt only until they reach a dollar limit on wages paid to farmworkers. After that, SUI tax becomes mandatory.
đ If this is your situation, you must track wages carefully to know when youâve hit the threshold.
What You Need to Do
If you think you might be exempt, or want to double-check:
Step 1: Check With Your State
Each state sets its own SUI exemption rules. Contact your stateâs unemployment insurance agency to get accurate information.
Not sure how to find them? Visit your state Department of Labor website or visit our state by state guide to learn more.
Step 2: Let Us Know
Once you confirm your exemption status:
Share it with the FarmRaise team
Weâll help you monitor any liability and flag compliance issues
If you're under a threshold-based exemption, weâll help you track wages so you donât miss the limit
Important Notes
Even if youâre exempt, you may still need to report wages in some states.
Exemptions donât necessarily apply to federal unemployment taxes (FUTA)âthose are separate.
If you become liable mid-year by exceeding the wage threshold, you may need to back-pay taxes to the beginning of the quarter or year, depending on your state.
Example: Threshold-Based Exemption
Letâs say your state exempts farms until they pay $20,000 in wages in a quarter. You should:
Track all wages paid to farm employees
Once you cross $20,000, notify FarmRaise and register with your state SUI agency
Begin withholding and remitting unemployment taxes as required
Still Not Sure?
Weâre here to help. Reach out to the FarmRaise team, and weâll walk you through:
What to ask your state agency
How to track wages effectively
What to do if your exemption status changes
By understanding your exemption status, youâll avoid surprises and stay compliant, so you can focus on running your farm, not worrying about penalties.