Average savings: $63 per employer a year
“Employers that pay into the system will move from Schedule 6 to Schedule 5, saving the average Oregon employer about $63 per employee annually, the agency said on Friday, November 14, 2014.”
Unemployment tax rates for most Oregon employers will decline Jan. 1, the Oregon Employment Department said Friday.
Employers that pay into the system will move from Schedule 6 to Schedule 5, saving the average Oregon employer about $63 per employee annually, the agency said.
Tax Schedule 5 includes an average rate of 2.53 percent for the first $35,700 paid to each employee. The specific rate each employer will pay under the new schedule depends on how much they have used the unemployment insurance system.
During the recession, 36 states depleted their trust funds to the point of needing to borrow money to cover unemployment insurance benefit payments. Businesses in many of those states face tax surcharges or reductions in federal tax credits.
Due to Oregon’s self-balancing formula, the state’s trust fund has maintained an adequate level despite record unemployment insurance payments, the Employment Department said.
Oregon law requires the Employment Department to use a statutory formula to determine employer payroll tax rates for the upcoming year. These taxes go into the unemployment insurance trust fund used to pay unemployment benefits.
At its lowest point, the trust fund had a balance of $700 million, but as of November 1, 2014, the balance stood at just over $2.2 billion.
Movement between the eight schedules of tax rates is one of the self-balancing aspects of Oregon’s unemployment insurance trust fund law.
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Each September, a formula contained in statute determines how much should be collected during the next year to maintain a solvent fund. Each schedule has a range of tax rates based on an employer’s previous unemployment insurance experience. Employers with more unemployment insurance claims have a higher tax rate than those with fewer claims.
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