Fortunately, however, the effect of a single UI claim on your state unemployment insurance tax rate is minimal to non-existent. More importantly, even if your UI rate increases, that additional cost is often less expensive than keeping on an employee who shows no willingness or ability to improve. If you have documented employee performance expectations and the employee still isn’t meeting them, I wouldn’t let the possibility of a higher UI rate dissuade you from termination. If you’re worried about your UI tax rate generally, the best thing you can do is minimize turnover.