Contribution Rates
For 2010, 2011 and 2012 the ranges of Ohio unemployment tax rates (also know as contribution rates) are as follows:
2010 2011 2012
Lowest Experience Rate 0.5% 0.7% 0.7%
Highest Experience Rate 9.4% 9.6% 9.1%
Mutualized Rate 0.2% 0.4% 0.4%
New Employer Rate 2.7% 2.7% 2.7% *except construction
*Construction Industry 6.0% 6.4% 7.0%
Delinquency Rate 11.8% 12.0% 11.4%
Rate Notification
Contribution Rate Determinations are mailed for the coming calendar year on or before December 1. The tax rate is also printed on the employer's Quarterly Tax Return (JFS-20125), which is mailed to employers quarterly for reporting and payment of taxes due. To determine how much tax is due each quarter, multiply the rate by the total taxable wages you paid during the quarter.
Experience Rate
Once an employer's account has been chargeable with benefits for four consecutive calendar quarters ending June 30, the account becomes eligible for an experience rate beginning with the next calendar year. The experience includes taxable wages reported, contributions paid (including voluntary payments) and benefits charged. Unemployment taxes paid are credited to an employer's account. Unemployment benefits paid to eligible claimants are charged to the accounts of the claimant's employers during the base period of the claim. These factors are recorded on the employer's account and are used to compute the annual tax rate after the employer becomes eligible for an experience rate.
Due to recent economic conditions and the resulting increase of unemployment claims filed, the Ohio Unemployment Compensation Trust Fund is more than sixty percent below the "minimum safe level" as of the computation date of the 2012 rates (The "minimum safe level" is, in essence, the balance required in the UC Trust Fund to fund a moderate recession). Therefore, the tax rate schedule in effect for 2012 includes an across the board minimum safe level increase to protect the financial integrity of the trust fund. This increase will help re-build the trust fund to the appropriate level. The additional taxes paid as a result of the minimum safe level increase are credited fifty percent (50%) to the mutualized account and fifty percent (50%) to the employer's account.
The experience rate shown on the Contribution Rate Determination is a combined total of the employer's individual experience rate and the minimum safe level increase.
Mutualized Rate
A separate account, known as the mutualized account, is maintained for the primary purpose of recovering the costs of unemployment benefits that were paid and not chargeable to individual employers for a variety of reasons. When the mutualized account has a negative balance, the costs are recovered and the money restored to the account through a mutualized tax levied on all employers who are eligible for an experience rate. The mutualized tax is used solely for the payment of unemployment benefits.
As of the computation date for the 2012 rates, the mutualized account had a negative balance and a mutualized rate of four-tenths of one percent (0.4%) was levied on all employers who were eligible for an experience rate. The mutual rate is shown on the Contribution Rate Determination. The additional taxes paid as a result of mutualized rate will be credited one hundred percent (100%) to the mutualized account to recover the costs of unemployment benefits charged to the account.
New Employer Rate
If an employer's account is not eligible for an experience rate, the account will be assigned a standard new employer rate of 2.7% unless the employer is engaged in the construction industry, in which case the 2010 rate is 6.0%, the 2011 rate is 6.4% and the 2012 rate is 7.0%.
Delinquency Rate
Employers who did not furnish the wage information necessary for the computation of their 2012 experience rate by September 1, 2011, were assigned a contribution rate equal to one hundred twenty-five percent (125%) of the maximum experience rate possible for 2012. However, if the employer files the necessary wage information by December 31, 2011, the rate will be revised to the appropriate experience rate.
Penalty Rate
Employers who file the necessary wage information after December 31, 2011, but within 18 months after that date, will have their 2012 rate revised to one hundred twenty percent (120%) of the rate that would have applied if the employer had timely furnished the wage information.