| General UI Rate Questions for All Employers |
1. What is experience rating?
Experience rating assigns tax rates to employers based on the amount of unemployment benefits their employees have received. Those employers with higher amounts of unemployment benefits charged to their accounts have a higher tax rate.
2. What are high experience rating industries?
High experience rating industries are those that that have historically had a high amount of unemployment.
These include:
- residential, commercial or industrial construction;
- sand, gravel or limestone mining;
- manufacturing of concrete, concrete products or asphalt; and
- road building, repair or resurfacing, including bridges, tunnels and residential and commercial driveways and parking lots.
The high employer tax rate is set by statute at 8.00% (§268.051, Subd. 5).
3. What is the base rate?
The same base rate is paid by all Minnesota taxpaying employers. It is determined each year based on the amount in the Unemployment Insurance Trust Fund on March 31 of the prior year per statute (§268.051, Subd. 2). The base rate for 2007 is 0.40% of taxable wages.
4. What is the additional assessment?
If the balance in the Minnesota UI Trust Fund on March 31 falls below certain levels, an additional assessment on quarterly taxes takes effect for the following year. In 2007, an additional assessment of 14.00% of tax due is in effect. (§268.051, Subd. 2)
5. What is the special assessment for interest on federal loans?
Unemployment Insurance benefit payments are made from the state UI trust fund, held in the federal treasury. When a state's UI trust fund is depleted because of high payouts during a recession, the State borrows from federal reserves. Interest is paid on the borrowed funds. For 2007 there is no federal loan interest assessment. (§268.051, Subd. 8 )
7. What is the workforce development fee?
The workforce development fee is a special revenue fund established to fund the state Dislocated Work Program and is deposited in the Minnesota Workforce Development Fund (§116L.20). The workforce development fee for 2007 is 0.10% of taxable wages.
8. Where can I view a quarterly breakdown of the taxable wages on my account?
You can view quarterly wage data in your online employer account. After logging in to your account:
Step 1: Select Tax and Wage Detail Reporting from your account menu.
Step 2: Select View History
Step 3: Click on the link Click here to view quarterly wages, UI taxes, etc. The system defaults to the current year, so if a different year is desired, select a different Reporting Year and click Search
Frequently Asked Questions for New Employers |
1. What is the new employer tax rate?
An employer who has paid wages for only a short time is assigned the new employer tax rate. It is based on benefits paid to Minnesota applicants and wages reported by Minnesota employers, plus the base tax rate. Eventually, each employer receives an experience rating based on the UI benefits paid and taxable payroll in their UI account. In 2007, an experience rating is assigned to each employer who paid wages to employees in covered employment on or before July 1, 2005.
2. Are all new employers given the same tax rate?
No. UI rates are assigned to new employers based on their business type. A higher rate is given to employers in the following high experience rating industries:
- residential, commercial or industrial construction;
- sand, gravel or limestone mining;
- manufacturing of concrete, concrete products or asphalt; and
- road building, repair or resurfacing, including bridges, tunnels and residential and commercial driveways and parking lots.
The new employer tax rate for those employers in high experience rating industries is set by statute at 8.00% (§268.051, Subd. 5) .
Frequently Asked Questions for Experience-Rated Employers |
1. How is my experience rating calculated?
Benefits charged to your account from July 1, 2002, through June 30, 2006 are multiplied by 1.25, then divided by the total taxable payroll that you reported on your quarterly wage reports for the same period. Experience ratings are computed to the nearest one-hundredth of a percent, to a maximum of 8.90% (§268.051, Subd. 3).
2. Where can I view a list of the benefits charged to my account?
You can find detailed information on benefit paid charges in your online employer account. After logging in to your account, select Benefit Paid Charge Activities from your account menu.
3. What is a tax rate buydown?
If your tax rate has been adversely affected by unemployment benefits paid to former employees, you may buy back some or all of the charges to reduce your tax rate. If you make a partial buydown, the most recent charges in the experience period will be cancelled first. A 25 percent surcharge will be included in the tax rate buydown (§268.051, Subd. 7). A calculation tool is available in your online account to assist you. Select Account Maintenance and then select Process Tax Rate Buydown.
4. When can this tax rate buydown be made?
The tax rate buydown must be received within 120 calendar days after the beginning of the calendar year for which the tax rate is effective (by April 30, 2007 for 2007 rates).
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