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Newly liable employers who do not acquire compensation experience from a previously liable employer begin with a predetermined tax rate set by the Texas Unemployment Compensation Act. That rate is set by the Texas Legislature and is the greater of the average rate for all employers in the NAICS code to which they belong or 2.70%. This percentage is multiplied by the taxable wages for each quarter to determine the amount of tax due for that quarter. The taxable wage limit is also set by statute and is currently $9,000.00 per calendar year, per employee.
These newly liable employers continue with the entry-level rate until they are chargeable throughout four full quarters. Chargeable simply means that they could have been charged with benefits to a former employee, it is not required that a claim be filed. In most cases an employer is not chargeable until their third quarter of paying wages. Employers must pay wages a minimum of 6 quarters to receive an experience rating.
Upon completion of the four chargeable quarters, an interim tax rate is assigned to the new employer and that rate is applicable for the duration of the calendar year that it is assigned. After that, an annual rate is assigned and it is applicable for a full calendar year. Tax rates (interim or annual) are calculated by using the taxable wages (upon which tax has been paid timely) and the amount of charges (if any) paid to former employees.
The Commission, at its own discretion, may adjust the Replenishment and the Deficit Tax Rates.
For details on how the 2013 Annual Tax Rate is calculated, select the 2013 link under the "Year" column.
|Year||Taxable Wage Base||Minimum Tax Rate||Maximum Tax Rate||Average Tax Rate||Average Experience Tax Rate|
An employer's annual tax rate may be reduced by making a voluntary contribution to decrease the chargeback total used in the tax rate computation. If you have chargebacks, a Voluntary Contribution Election Form (Form C-24) must be completed and submitted along with the desired payback amount. Voluntary Contribution election forms are provided each year along with the annual Tax Rate Notice (Form C-22). Annual rate notices for the forthcoming year are mailed in mid December of the prior year. If you have claims against your account, you may find it beneficial to "buy down" the tax rate. For more information, please visit the Voluntary Contribution Analysis where you will find a handy way to calculate a "buy down" and evaluate the return on the up-front investment.
Here is some general information regarding Voluntary Contributions:
A governmental employer's annual contribution rate is computed in accordance with Chapter 204, Subchapter F of the Texas Unemployment Compensation Act. Unemployment Insurance tax rates are computed for taxed governmental employers as a group. All taxed governmental employers have the same rate. Unemployment Insurance tax rates for taxed governmental employers are determined by how much the group has cost the Fund in benefit payments to their ex-employees as compared to the amount of taxes that the group has paid. The annual contribution rate is expressed as a percentage. The numerator is the amount of all benefits paid, less benefits paid and reimbursed from other sources. If the amount of benefits paid is greater than the contributions paid, the excess benefits paid shall be added. If the amount of benefits paid is less than the contributions paid, the excess contributions shall be deducted. The denominator is the amount of the total wages paid by employers in the group. The table shown below is the history of governmental tax rates for the previous ten years.
|Rate Year||Effective Tax Rate|
|Benefits Paid and Charged to Taxed Political Subdivisions||$ 11,921,576.92|
|- Contributions Collected in Excess of Benefits Paid (Reduction to Benefits Paid)||$ 12,187,590.29|
|+ Benefits Paid in Excess of Contributions Collected (Increase to Benefits Paid)||$ 0.00|
|Adjusted Amount of Benefits Paid to All Claimants of Taxed Political Subdivisions for the year ended December 31st.||$ -266,013.37|
|Total Wages Paid by all Taxed Political Subdivisions for the year ended December 31st.||$ 831,639,772.61|
A governmental employer may elect to be a reimbursing employer and repay the Unemployment Compensation Fund, dollar for dollar, for benefits paid to former employees. Chapter 205, Subchapter A of the Texas Unemployment Compensation Act (TUCA) authorizes a Political Subdivision to elect reimbursement to the unemployment compensation fund in lieu of contributions.
To learn more about governmental employers, visit our Governmental Employers FAQ page.
A detailed listing of the individuals making up the three-year total of benefit chargebacks used in your Benefit Ratio may be obtained by using any of the following methods:
If you have a question about an individual chargeback claim, include your account number, the claimant's Social Security Number and the initial claim date, and send the request to:Texas Workforce Commission
Please e-mail questions or comments to email@example.com
Last Verified: March 05, 2013
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