Tax Rate Calculations/ Unemployment Benefit Charges

1. Tax Rate Calculations/ Unemployment Benefit Charges “Strategies for Maximizing Business Opportunities” Employer Conference

2. New Employer Tax Rates • Assigned the new employer base tax rate, plus pool cost charge and fund building charge • If acquiring an existing business-assigned the predecessor tax rate unless waived • Out-of State Contractors-Assigned the maximum tax rate

3. Experience Rating System • Based on employer’s experience consisting of the last four fiscal years ending on June 30 • Charges for benefits paid during this period • Employer’s taxable payroll on which UI taxes were paid during this period • Benefit ratio is determined by dividing the benefit charges by the taxable payroll • Benefit ratio is put into percent form and applied to the experience rating tax table • Experience rating tax table determines employer’s base tax rate

4. Additional Tax Rate Costs • Pool Cost Charge: Compensates for charges that cannot be assigned to any specific employer. • Fund Building Charge: Applied when the trust fund balance does not exceed 50% of solvency

5. Tax Rate Notice • Mailed in December notifying the employer of their tax rate for the upcoming calendar year • Identifies the taxable payroll and unemployment benefits paid for the last four fiscal years ending on June 30 • Identifies the base tax rate, pool cost charge and fund building charge

6. VEC Tax Rate Information

7. Average Tax Per EmployeeState Comparisons

8. Average Tax Rate Comparisons

9. Pool Charge Projections

10. Trust Fund Solvency Projections

11. Maximum Weekly Benefit Amount

12. Unemployment Benefit Charges • For Tax Paying Employers: Charged to the claimant’s last thirty (30) working day employer or employer in which they last worked 240 hours • The days do not have to be consecutive • Disputed claims- respond timely to all inquiries by VEC staff • When charged-employer receives a quarterly charge statement identifying claimants and benefits paid

13. Claimant’s Base Period of Employment

14. Reimbursable Employers • Governmental Agencies, political subdivisions, and election by liable 501 C3 exempt organizations • Do not pay quarter taxes similar to tax paying employers. • Pay a pro rated bill based on the reported wages in the claimant’s base period of employment.

15. Reimbursable Account Unique Features • May not be the separating employer but gets the charge due to the claimant’s base period • Pays dollar-for-dollar to reimburse the Trust Fund for benefits paid • If claimant is later disqualified, employer remains responsible for bill until over-payment is recovered from the claimant

16. New Information 2011 • FUTA –Due to outstanding loans- SUTA tax credit is reduced by .3% • FUTA-Effective 7-1-2011 gross FUTA tax is reduced from 6.2% to 6% • Effective November 1, 2011, VEC will no longer accept magnetic media for filing the quarterly tax reports • Employers who employ over 100 employees-must submit the payroll by either iFile or Web Upload beginning 4th qtr. 2011 • Enrollment and Secure filing: https://www.webupload.tax.virginia.gov/user/login https://www.ireg.tax.virginia.ggov/VTOL/Login.seam

17. Resources • See www.vec.virginia.gov for the following: • The VEC office serving your area- • For Tax information ask to speak to a tax representative • For Benefits information-ask to speak to a supervisor or manager • Virginia Employers Handbook • Unemployment Benefit Rights and Responsibilities • Unemployment Benefits- Frequently asked Questions • Virginia Unemployment Compensation Act

18. Additional Resources • Try iFile for a new and improved way to file your VEC and Department of Taxation information: https:///www.business.tax.virginia.gov • Thank you for using the services of the Virginia Employment Commission