We compute a statewide required income each year by adding the estimated level of benefit to be paid out in the upcoming calendar year and the amount of income required to repay outstanding federal loans within five years. This level of required revenue is then used to set the base tax rates for classes 1 through 20.

The required income is divided by the projected level of taxable wages for the upcoming calendar year. This number represents the average tax rate that would need to be in effect on all employers to generate the required level of income.

To set the tax rate for employers in tax class 20, this average tax rate is multiplied by 20 and divided by the sum of the experience factors. The experience factors are established in state law 41-31-50, where the experience factor for rate class 20 is 1.00; the factor for class 19 is 0.900; the factor for class 18 is 0.810, etc (Note: Experience factors may be weighted if the percent of taxable wages falling into tax class 1 is greater than 5%).

The remaining tax rates are set in accordance with 41-31-50 where tax rate 19 is 90% of tax rate 20; tax rate 18 is 90% of tax rate 19; etc.

Each employer is also assessed a 0.06% Departmental Administrative Contingency Assessment as well as an interest surcharge. The interest surcharges for the tax classes are set by dividing the estimated interest income required by the projected taxable wages for the upcoming year, the statewide average interest surcharge.

The interest surcharge for tax class 20 is determined by multiplying the statewide average interest surcharge by 20 and dividing by the sum of the experience factors as established in state law 41-31-55 (Note: Experience factors may be weighted if the percent of taxable wages falling into tax class 1 is greater than 5%). The remaining interest surcharges are set in accordance with 41-31-55 where interest surcharge for class 19 is 90% of the surcharge for class 20, etc.

The tax rate associated with the benefits and loan repayments is added to the interest surcharge and the 0.06% contingency assessment to determine the final effective tax rate for each class. A complete list of the tax rates can be found in the CY2011 contribution table.

 

Unemployment Tax Rate Table for CY2012

Rate Class	Lower Benefit Ratio	Upper Benefit Ratio	Base Rate/Replenish	Interest + Contingency	Total Effective Rate
1	0.000000	0.000013	0.00	0.098	0.0980
2	0.000014	0.002175	0.71	0.102	0.8120
3	0.002176	0.003907	0.79	0.107	0.8970
4	0.003908	0.005084	0.88	0.112	0.9920
5	0.005085	0.005928	0.97	0.118	1.0880
6	0.005929	0.007516	1.08	0.125	1.2050
7	0.007517	0.008601	1.20	0.132	1.3320
8	0.008602	0.010330	1.33	0.140	1.4700
9	0.010331	0.012091	1.48	0.149	1.6290
10	0.012092	0.013907	1.65	0.159	1.8090
11	0.013908	0.016098	1.83	0.170	2.0000
12	0.016099	0.019060	2.03	0.182	2.2120
13	0.019061	0.022324	3.89	0.292	4.1820
14	0.022325	0.026485	4.33	0.318	4.6480
15	0.026486	0.032421	4.81	0.347	5.1570
16	0.032422	0.039447	5.34	0.379	5.7190
17	0.039448	0.049122	5.93	0.414	6.3440
18	0.049123	0.060059	6.59	0.453	7.0430
19	0.060060	0.084817	7.32	0.497	7.8170
20	0.084818	999.999999	8.14	0.546	8.6860

 

Unemployment Tax Rate Table for CY2011

Tax Class	Base Rate	Interest Surcharge	Contingency Assessment	Total Effective Rate	Estimated Cost per Worker	Lower Benefit Ratio	Upper Benefit Ratio
1	0.00%	0.043%	0.06%	0.1030%	$10.30	0	0.000001
2	0.71%	0.048%	0.06%	0.8180%	$81.80	0.000002	0.002158
3	0.79%	0.053%	0.06%	0.9030%	$90.30	0.002159	0.003671
4	0.88%	0.059%	0.06%	0.9990%	$99.90	0.003672	0.004738
5	0.98%	0.066%	0.06%	1.1060%	$110.60	0.004739	0.005738
6	1.09%	0.073%	0.06%	1.2230%	$122.30	0.005739	0.007117
7	1.21%	0.081%	0.06%	1.3510%	$135.10	0.007118	0.008299
8	1.34%	0.090%	0.06%	1.4900%	$149.00	0.0083	0.010035
9	1.49%	0.100%	0.06%	1.6500%	$165.00	0.010036	0.012092
10	1.66%	0.111%	0.06%	1.8310%	$183.10	0.012093	0.013992
11	1.84%	0.123%	0.06%	2.0230%	$202.30	0.013993	0.01601
12	2.04%	0.137%	0.06%	2.2370%	$223.70	0.016011	0.018711
13	3.91%	0.263%	0.06%	4.2330%	$423.30	0.018712	0.022235
14	4.35%	0.292%	0.06%	4.7020%	$470.20	0.022236	0.026332
15	4.83%	0.324%	0.06%	5.2140%	$521.40	0.026333	0.032546
16	5.37%	0.360%	0.06%	5.7900%	$579.00	0.032547	0.039836
17	5.96%	0.400%	0.06%	6.4200%	$642.00	0.039837	0.050293
18	6.62%	0.445%	0.06%	7.1250%	$712.50	0.050294	0.065183
19	7.36%	0.494%	0.06%	7.9140%	$791.40	0.065184	0.088588
20	8.18%	0.549%	0.06%	8.7890%	$878.90	0.088589	1000

 

Contribution Rate Table for CY2004 - CY2010

Employer’s Reserve Ratio	Base Rate	<2.00% 0.10%	<1.90% 0.20%	<1.80% 0.30%	<1.70% 0.40%	<1.60% 0.50%	<1.50% 0.60%	<1.40% 0.70%
+9% or More	0.54%	0.64%	0.74%	0.84%	0.94%	1.04%	1.14%	1.24%
+8% but <9%	0.89%	0.99%	1.09%	1.19%	1.29%	1.39%	1.49%	1.59%
+7% but <8%	1.24%	1.34%	1.44%	1.54%	1.64%	1.74%	1.84%	1.94%
+6% but <7%	1.59%	1.69%	1.79%	1.89%	1.99%	2.09%	2.19%	2.29%
+5% but <6%	1.94%	2.04%	2.14%	2.24%	2.34%	2.44%	2.54%	2.64%
+4% but <5%	2.29%	2.39%	2.49%	2.59%	2.69%	2.79%	2.89%	2.99%
<+4% but >-5%	2.64%	2.74%	2.84%	2.94%	3.04%	3.14%	3.24%	3.34%
-5% but <-10%	2.99%	3.09%	3.19%	3.29%	3.39%	3.49%	3.59%	3.69%
-10% but <-15%	3.34%	3.44%	3.54%	3.64%	3.74%	3.84%	3.94%	4.04%
-15% but <-20%	3.69%	3.79%	3.89%	3.99%	4.09%	4.19%	4.29%	4.39%
-20% but <-25%	4.04%	4.14%	4.24%	4.34%	4.44%	4.54%	4.64%	4.74%
-25% but <-30%	4.39%	4.49%	4.59%	4.69%	4.79%	4.89%	4.99%	5.09%
-30% but <-35%	4.74%	4.84%	4.94%	5.04%	5.14%	5.24%	5.34%	5.44%
-35% but <-40%	5.09%	5.19%	5.29%	5.39%	5.49%	5.59%	5.69%	5.79%
-40% or More	5.40%	5.50%	5.60%	5.70%	5.80%	5.90%	6.00%	6.10%

Around January 31, we mail a Notice of Contribution Rate to employers showing their rate for the current year. This form provides a detailed schedule rate computation. In addition to the contribution rate, we assess a 0.06 percent contingency charge upon wages as defined in Section 41-27-380. See Section 41-27-410.