Determination of Unemployment Tax Rate in Washington
Any individual who is considered as unemployed and has been declared as the eligible candidate to claim the unemployment compensation by the state of Washington can receive the unemployment benefit.
The primary objective of Unemployment Insurance Benefits is to provide temporary income for those workers who become involuntarily unemployed.
Unemployment Rate of Washington
As per the report of BLS Current Population Survey (CPS) the rate of unemployment in Washington fell down for 0.2 percentages as of February 2012 to 8.2%. The unemployment rate in Washington is lowered by 2.0 %.
The State Unemployment rate is 0.1 percentage less than that of national rate for the month.
Source of the unemployment Benefit in Washington
By calculating the total wages paid to the employees in the determined base period an employer needs to pay tax as per the laws of unemployment payment.
How Your Tax Rate is Determined?
In general, the employer’s payable tax depends on how much their former workers were paid as salary. To sum up unemployment compensation is based on employee payrolls.
So, how it works?
There are two major components of state of Washington unemployment taxes: 1)How does your benefit ratio compares with other employers’ benefit ratios? 2)Which rate schedule is in effect at present time?
As of this year 2012, the standard Unemployment Tax in Washington is rated as 2.12% and the qualified tax rates is calculated from 0.14% as basic to 5.82%. As per the updated legislation or law of unemployment insurance Washington, the lowest tax rate for an experienced employer as per 2012 is 0.92% and the highest is up to 7.85%.
Calculation procedure of Washington employer’s unemployment insurance tax rate
Generally unemployment taxes are calculated using a formula that would be stated in UI’s State Law. In Washington, the Employment Security Department does not have an independent authority to adjust the rate.
As mentioned above there are two components to determine state unemployment tax. Basic components of the tax rate are the experience of based tax that is based on the amount of unemployment benefits paid to ex-employees. Generally there are about 40 experience rate standards and businesses fluctuate with ups and down these standards are based on their past experiences.
The second component is the tax rate that is also known as social cost tax. This social cost tax covers the unemployment costs that cannot be recovered under specific business. Hence, the social cost tax is shared by all the employers. The social cost tax is said to be the brake to slow the decline of the trust fund. By implementing this, employers are not directly hit by sharper tension of more sudden tax to be increased in the future.
Based on this calculation, in 2012 employers will pay taxes on the first $38,200 of each employee’s wages.
Highest, lowest and average tax rates in Washington
As of 2012, the least rate to pay the tax for the employers in the Washington would be 0.14 percent. Taxable employers in the highest rate of class pay would be of 5.82 percent.
To sum up, the average tax rate payable in the year 2012 would be estimated to be about 2.12 percent. Note there is decline of 13 percent compared to previous year.
Finally, the delinquent employer needs to pay the additional tax of about 2 percent extra.Related Tags : unemployment Benefit in Washington, Unemployment Rate of Washington
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