What Is The Employer Contribution Rate?
A newly liable employer is assigned the larger tax rate determined by alternative methods. The tax rate may be the average rate assigned to all employers plus one percent. Or the rate may be the average rate for employers in a comparable industry plus one percent. The tax rate can not be lower than two percent. After three years, when original liability is established before July 1st, the employer will have a tax rate computed with experience rate factors.
Experience rating is a procedure for varying employer rates and allocating costs of the unemployment insurance program in relation to the employer's actual and potential risk with unemployment. This is accomplished by the department keeping an individual experience rating account for each liable employer. All tax payments are added and all benefit charges are subtracted from the experience rating account. This provides an opportunity for contributing employers to "earn" a tax rate based on their own individual experience and their potential risk of unemployment. The procedure also helps to ensure an adequate trust fund balance.
Contributions are determined by multiplying a specified contribution rate times a taxable payroll determined on an $8,000 wage base earned by each employee during a calendar year.
The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.
Additional Employment Law for Employees Articles
- How Do I Know If I Am Liable For Unemployment Taxes?
- How Do I Report Wages And Pay Taxes?
- What Is The New Hire Law?
- Where Do I Report If I Have Employees In More Than One State?
- Where Can I Get More Information On The New Hire Program?
- How Old Does A Child Have To Be In Order To Work?
- What Hours Can Children Work?
- Are There Certain Occupations That Are Prohibited For Minors?
- How Often Does My Employer Have To Pay Me?
- Can My Employer Fire Me Without Reason Or Notice?
- If I Am Overpaid, Can My Employer Deduct The Amount Of The Overpayment From My Paycheck?
- When Is My Employer Required To Pay Me Overtime?
- Does My Employer Have To Offer Vacation Or Sick Leave?
- Must An Employer Provide Rest Breaks For Workers?
- Is An Employee Required To Give Two Weeks Notice When Quitting A Job?
- Can My Employer Make Me Take A Drug Test?
- Is An Employer Required To Pay For Jury Duty Or Allow Time Off For Jury Duty?
- What Can I Do If My Employer Refuses To Pay Me?
- How Do I File A Claim For Unemployment Insurance Benefits?
- How Is My Benefit Amount Calculated?
- How Do I File Weekly Claims For Benefits?
- What Is A One-Week Waiting Period?
- Can I Work Part Time And Receive Benefits?
- Will Other Income Reduce My Benefits?
- What Are Extended Benefits?
- Are My Benefits Taxable?
- Can I Get Help Finding A Job?
- What Can I Do If I Am Denied Unemployment Benefits?