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General UI tax rate questions

Understanding your unemployment insurance (UI) tax


The amount of UI tax you pay each quarter is based on five components. The amount of each component is set by statute:

  • Base Tax Rate - same for all employers
  • Tax Rate for New Employers (assigned by law) - OR - Your Experience Rating (varies by employer)
  • Additional Assessment -- same for all employers
  • Workforce Development Assessment - same for all employers
  • Taxable Wage Base - amount of wages paid to each employee that is taxable

2017 Components:


Component Amount Description
Taxable Wage Base $32,000 per employee per year Amount of wages paid to each employee that is taxable - same for all employers
Base Tax Rate 0.10% of taxable wages Same for all employers

Tax Rates for New Employers

1.44%* or 8.34%**

Assigned by Minnesota Statute

Your Experience Rating Refer to your 2017 UI Determination of Tax Rate Calculated for each employer that qualifies for an experience rating
Additional Assessment None for 2017 Assigned by Minnesota Statute

In addition, the following assessment is collected for the Workforce Development Fund:

Component Amount Description
Workforce Development Assessment 0.10% of taxable wages Same for all employers

The Total Due Estimator found on your Determination of Tax Rate gives you a percentage you can use to estimate the amount you will actually pay each quarter.

Terms and definitions used with tax rate information:

Additional Assessment
If the UI Trust Fund balance falls below a certain level, an Additional Assessment takes effect the following year.

Base Tax Rate
The Base Tax Rate is paid by all Minnesota, taxpaying employers. It varies from year to year depending on the balance in the Minnesota UI Trust Fund.

Employer with an Experience Rating
Your experience rating reflects your employment history. The total amount of UI benefits that are charged to your account during the period of July 1, 2012 through June 30, 2016, is multiplied by 1.25, and then divided by the total taxable wages that you reported on your wage detail reports for the same period.

Tax Rates for New Employers
New employers are assigned one of two new employer tax rates each year until they qualify for an experience rating. To have an experience rating for the 2017 UI tax year, an employer must have paid wages in covered employment on or before June 30, 2015.

*Non-High Experience Rating Industry Tax Rate for 2017 is 1.49%.
This rate is the average of the UI experience for all Minnesota employers. The rate is assigned to new employers who are not in high experience rating industries and is set at 1.44% for 2017 - down from 1.49% in 2016.

**High Experience Rating Industry Tax Rate for 2017 is 8.34%.
This rate is the average of the UI experience for all Minnesota employers in high experience rating industries. High experience rating industries include construction, mining, manufacturing of concrete, concrete products, asphalt, and road building, repair or resurfacing. The rate is assigned to new employers in high experience rating industries and is set at 8.34% for 2017.

Taxable Wages
The taxable wage base is the amount of wages paid to each employee that are taxable. It is recalculated every year to keep pace with the average wage of Minnesota workers.

UI Trust Fund
Unemployment benefits are paid to applicants from the UI Trust Fund. The UI tax rate is structured to ensure that there are sufficient funds to pay benefits without the need to borrow from the federal treasury.

Workforce Development Assessment
This assessment is deposited in the Workforce Development Fund and is used to re-train unemployed Minnesota workers.

Additional information:

Experience Rating Calculations
You can view the factors that went into calculating your experience rating by logging in to your online account (see View Tax Rate Determination in the Employer User Guide for step-by-step instructions).

Benefits Paid Charges
You can find details on the benefits charged to your account. Select Benefits Paid Charge Activities from your account menu. You will find links to web pages that display benefits paid charge information by individual, by calendar quarter, and by fiscal year.

Taxable Wages
You can view wage data in your online account. Select Tax and Wage Detail Reporting from your account menu, and then select View History to view quarterly wages, taxes, assessments and fees.

Federal Unemployment Tax Act (FUTA) Tax
In addition to your state UI tax, you pay a FUTA tax annually to the IRS. Your FUTA tax will be greatly reduced if you pay the state UI tax in full and on time. You can view FUTA calculations under Payment Information in your online account.

Tax Rate Buydown
You can buydown (reduce) some, or all, of the experience rating portion of your UI tax rate. You can do this by making a payment to reduce the benefits paid that are charged to your account. Those charges are then no longer used to calculate your experience rate. For employers who are increasing their staffing levels this can be an effective way to manage UI tax costs.

The buydown option is only available January 1, 2017 through April 28, 2017. A buydown calculator is available beginning January 1, 2017 in the Account Maintenance section of your online account. For more information about the buydown option, refer to the Tax Rate Buydown section of the Employer Handbook.

Taxable Wages
You can view wage data in your online account. Select Tax and Wage Detail Reporting from your account menu, and then select View History to view quarterly wages, taxes, assessments and fees.
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