Ever wonder how your State Unemployment Rate is calculated?

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States use one of four methods to determine an employer’s experience rate: reserve ratio (most common), benefit ratio, benefit wage ratio, and payroll stabilization.

Reserve Ratio =     Unemloyment taxes paid – Benefits Charged
Average Taxable Payroll

Benefits Ratio =   Benefits Charged
Total Taxable Payroll

Benefit Wage Ratio =   Benefit Wages Paid
Total Taxable Payroll

Payroll Stabilization. Currently Alaska is the only state utilizing this method.  Under payroll stabilization, the employer’s tax rate is determined by quarter to quarter, and year to year payroll fluctuations. Essentially, as more employees are terminated and total payroll decreases, the employer’s tax rate will increase.

What method does your state use?

Alabama: Benefit Ratio
Alaska: Payroll Stabilization
Arizona: Reserve Ratio
Arkansas: Reserve Ratio
California: Reserve Ratio
Colorado: Reserve Ratio
Connecticut: Benefit Ratio
Delaware: Benefit Wage Ratio
District of Columbia: Reserve Ratio
Florida: Benefit Ratio
Georgia: Reserve Ratio
Hawaii: Reserve Ratio
Idaho: Reserve Ratio
Illinois: Benefit Ratio
Indiana: Reserve Ratio
Iowa: Benefit Ratio
Kansas: Reserve Ratio
Kentucky: Reserve Ratio
Kentucky: Reserve Ratio
Louisiana: Reserve Ratio
Maine: Reserve Ratio
Maryland: Reserve Ratio
Massachusetts: Reserve Ratio
Michigan: Benefit Ratio
Minnesota: Benefit Ratio
Mississippi: Benefit Ratio
Missouri: Reserve Ratio
Montana: Reserve Ratio
Nebraska: Reserve Ratio
Nevada: Reserve Ratio
New Hampshire: Reserve Ratio
New Jersey: Reserve Ratio
New Mexico: Reserve Ratio
New York: Reserve Ratio
North Carolina: Reserve Ratio
North Dakota: Reserve Ratio
Ohio: Reserve Ratio
Oklahoma: Benefit Wage Ratio
Oregon: Benefit Ratio
Pennsylvania: Benefit/Reserve Ratio
Puerto Rico: Reserve Ratio
Rhode Island: Reserve Ratio
South Carolina: Reserve Ratio
South Dakota: Reserve Ratio
Tennessee: Reserve Ratio
Texas: Benefit Ratio
Utah: Benefit Ratio
Vermont: Benefit Ratio
Virginia: Benefit Ratio
Washington: Benefit Ratio
West Virginia: Reserve Ratio
Wisconsin: Reserve Ratio
Wyoming: Benefit Ratio

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