Beginning Tax Rates

Each employer that becomes liable to report workers' wages and pay unemployment taxes is assigned to an industrial classification division. Until eligible for an experience rate, regular employers (not including governmental entities and certain nonprofit organizations) are assigned an annual tax rate which is the average tax rate computed during the preceding year of all employers within the industrial classification division to which assigned, or 2.7%, whichever is the highest.

Nonprofit organizations described under Section 501(c)(3) of the Internal Revenue Code and governmental entities are assigned an annual tax rate of 1.0% until eligible for an experience rate. These organizations also have the option of making reimbursable payments.

Based on the cash balance of the Unemployment Trust Fund, there may be an increase or decrease to these annual rates (see Contribution Rate Adjustment).

For the years 2009, 2010 and 2011, new employers established between January 1 and August 1 will be liable for the unemployment automation surcharge.  The otherwise-applicable contribution rate of each new employer liable for the automation surcharge will be reduced by five one-hundredths of one percent.  New employers established after July 31st will not be liable for the automation surcharge; they also will not have their rate reduced by five one-hundredths of one percent.

See table of beginning rates for current and prior years. The rates shown include the applicable contribution rate adjustment.

Employers participating in the shared work program would be assigned a rate of 9.0% plus any applicable maximum rate surcharge and contribution rate adjustment and reduction due to the unemployment automation surcharge if applicable until eligible for an experience rate.