To begin to control your unemployment costs, you must first understand how the state calculates your tax rate. This diagram illustrates simply how your tax rate is determined.

Tax Rate Determination

 

 

Upon a claimant receiving benefits, state agencies must then determine which employers will be charged. This means they determine which employers experience accounts will receive the charges made to the claimant. Most state agencies use a base period to determine which employers are potentially responsible for these payments. Below is the current base period if a claimant filed benefits during the 1st Quarter 2013. The hours and wages reported by employers for a claimant in the green section would be considered potential chargeable employers. (There are ways to request your account not be charged, please contact CCC for additional information.)

CCC.BasePeriod.1Q16

 

While the base period determines which employers are in the base period, states have several different methods of determining how they will distribute these charges. The chart below are the ways various states determine how they will distribute these charges. To find out about your specific state, contact CCC.

ChargeDistribution

 

If the state has identified your organization as a chargeable employer, the charges are then used to calculate your tax rate for the follow tax season. Most states have a fiscal year that runs from July-June 30th of each year, but it may not be until 4th quarter than you receive the determined tax rate notice for the following year.

The chart below are the various methods that state unemployment agencies may use to determine an employer’s tax rate.

 

StateRateDetermination

 

This article is intended to be a general overview, for more specifics regarding your tax rate, contact CCC’s Tax Department at (800) 207-6926.


Contact CCC to see how we can save your organization time and money.
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