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State adjusts employer tax rates next year
Friday, November 28, 2008 | No comments posted.
The Oregon Employment Department will increase the average tax rate charged to employers for unemployment insurance in 2009.
As of January, the average tax will increase from 1.73 percent to 1.97 percent of payroll.
The agency reviews employer tax rates annually. Oregon has eight tax schedules. Schedule 8 collects the most tax revenue, Schedule 1 the least.
The tax schedules are designed to ensure there is enough money in the state trust fund to pay unemployment insurance benefits to workers. Moving between tax schedules creates a self-balancing trust fund.
In times of low unemployment, the fund builds up because fewer individuals need to claim benefits.
Consequently, as the fund builds, the need for more revenue decreases, and the taxes go down.
Then in times of high unemployment, when many claim benefits, the fund depletes faster leading, eventually, to higher taxes that replenish the fund.
Each schedule has a range of tax rates and an employer’s individual rating depends on his or her previous experience with the Unemployment Insurance system.
Employers should receive a notice in the mail from the department regarding their particular ratings.
As of January, the average tax will increase from 1.73 percent to 1.97 percent of payroll.
The agency reviews employer tax rates annually. Oregon has eight tax schedules. Schedule 8 collects the most tax revenue, Schedule 1 the least.
The tax schedules are designed to ensure there is enough money in the state trust fund to pay unemployment insurance benefits to workers. Moving between tax schedules creates a self-balancing trust fund.
In times of low unemployment, the fund builds up because fewer individuals need to claim benefits.
Consequently, as the fund builds, the need for more revenue decreases, and the taxes go down.
Then in times of high unemployment, when many claim benefits, the fund depletes faster leading, eventually, to higher taxes that replenish the fund.
Each schedule has a range of tax rates and an employer’s individual rating depends on his or her previous experience with the Unemployment Insurance system.
Employers should receive a notice in the mail from the department regarding their particular ratings.
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