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Tax Rate Calculations/ Unemployment Benefit Charges. “Strategies for Maximizing Business Opportunities” Employer Conference Oct 12, 2011. New Employer Tax Rates.

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tax rate calculations unemployment benefit charges

Tax Rate Calculations/ Unemployment Benefit Charges

“Strategies for Maximizing Business Opportunities”

Employer Conference

Oct 12, 2011

new employer tax rates
New Employer Tax Rates
  • Assigned new employer Base Tax Rate (2.5%), plus pool cost charge and fund building charge. (New employer rate varies each year based on Trust Fund factors. Assigned for 2 - 3 calendar years)
  • If acquiring an existing business - Assigned predecessor tax rate unless transfer of experience waived (Must be waived within 60 days of the date of acquisition)
  • Out-of-State Building/Highway Contractors - Assigned maximum tax rate
employer experience rating
EmployerExperience Rating
  • Benefit Ratio: Based on employer’s experience consisting over last 4 completed fiscal years (July 1 through June 30)
  • Charges for benefits paid are divided by employer’s state unemployment taxable payroll for that period
  • Benefit ratio converted to percentage form and applied to experience rating tax table to create Base Tax Rate
unemployment benefit charges
Unemployment Benefit Charges
  • For Tax Paying Employers: Charge claimant’s last 30 working day/240 hour employer
  • Work days do not have to be consecutive
  • Disputed claims - respond timely to all inquiries by VEC staff to ensure effective participation in the adjudication process
  • Charged employer receives quarterly charge statement identifying claimants and benefit amounts paid to them
additional tax rate costs
Additional Tax Rate Costs
  • Pool Cost Charge: Compensates for charges that cannot be assigned to any specific employer (out-of-business, not-covered, higher than max rate, etc)
  • Fund Building Charge (.2%): Imposed when the trust fund balance does not exceed 50% solvency
tax rate notice
Tax Rate Notice
  • Mailed in December notifying employer of tax rate for upcoming calendar year
  • Reflects state unemployment taxable payroll and unemployment benefits paid for last four fiscal years (July 1 through June 30) used to calculate Base Tax Rate. Also includes Pool Cost Charge and Fund Building Charge info

Tax Rate= Base Tax Rate + Pool Cost Charge + Fund Building Charge

  • Tax Rates normally assigned by calendar year
reimbursable self insured employers
Reimbursable (Self-Insured) Employers
  • All state agencies, many political subdivisions, and many 501c3 non-profit organizations
  • Do not pay quarter taxes like tax-paying employers.
  • Pay quarterly bill pro-rated based on employer’s reported wage amounts in claimant’s base period.
reimbursable accounts unique features
Reimbursable AccountsUnique Features
  • May not be separating employer but gets charge due to claimant’s base period wages (or alternate base period)
  • Pays dollar-for-dollar to reimburse Trust Fund for benefits paid on pro-rated basis
  • If claimant is later disqualified, employer remains responsible for bill until over-payment is recovered from claimant
new information for 2011
New Information for 2011
  • FUTA - Due to outstanding loans SUTA tax credit is reduced by .3%(5.4% to 5.1%)
  • 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 quarterly tax reports
  • Employers with over 100 employees - must submit payroll by either iFile or Web Upload for 4th qtr. 2011

Enrollment and Secure filing:

www.webupload.tax.virginia.gov/user/login

www.ireg.tax.virginia.gov/VTOL/Login.seam

resources
Resources

See www.vec.virginia.gov for the following:

  • The VEC office serving your area
  • For state UI Tax information - ask to speak to a tax rep
  • For Benefits information - ask to speak to a supervisor or manager
  • Virginia Employers’ Handbook
  • FAQs - Employer UI Tax Questions
  • FAQs - Unemployment Benefits
  • Virginia Unemployment Compensation Act
additional information
Additional Information
  • Try iFile or Web Upload for a new and improved way to file your VEC and Department of Taxation information: www.business.tax.virginia.gov
  • Thank you for using the services of the Virginia Employment Commission