How Is My Tax Rate Determined?
You compute your tax on the taxable amount of the first $8000 earned by each worker. All unemployment insurance programs are "experience rated," which means that the amount of tax an employer pays is directly related to his experience in the program; that is, the amount of tax paid in compared to the amount of benefits paid out.
First, a rate must be assigned to a new employer before there can be any experience rating. Once an employer begins to pay tax (and possibly be charged benefits), the division keeps track of the balance in his reserve account. Once your reserve ratio is determined, your rate is assigned by finding the tax bracket that the ratio falls in for the tax schedule in effect for the year. The division issues a "Notice of Contribution Rate" annually to each active employer indicating the new rate and containing the information used in calculating it.
In addition to the unemployment tax, which you are required to pay, you may make additional payments into your reserve account to reduce a deficit balance or to increase a positive balance. Since tax rates are based on reserve account balance, changing your balance can lower your next year's tax rate.
Get Help from an Experienced Employment Law Attorney
Have you been discriminated against by a potential or current employer -- as a job applicant or current employee? To best protect your legal rights you should discuss your situation with an employment lawyer. Meet with a local employment for employees attorney sooner rather than later to protect your rights.
Additional Employment Law for Employees Articles
- What Are The Eligibility Requirements To Draw Unemployment Benefits?
- How Is My Benefit Amount Determined?
- How Do I File A Claim For Unemployment Benefits?
- Can I Claim Partial Benefits?
- When Do Extended Benefits Go Into Effect?
- How Much Can A Claimant Receive In Extended Benefits?
- Please Explain Electronic Claims Filing.
- How Do I Know If I Am Liable For State Unemployment Taxes?
- How Do I Establish An Unemployment Tax Account?
- How Do I Report Wages And Pay Unemployment Tax?
- What Are Reimbursing Accounts?
- Is A Work Permit Required For Employment Of A Minor?
- What Hours Can Children Work?
- Are There Certain Occupations That Are Prohibited For Minors?
- Where Can I Obtain More Information On Child Labor Laws?
- What is the minimum wage in Kentucky?
- How Soon Must My Employer Pay Me If I Quit?
- What Can I Do If I Am Denied Unemployment Benefits?