All Minnesota Businesses with employees must file a quarterly Unemployment Insurance tax each quarter. Think of it as an insurance premium that can change with your company history. Just as drivers with clean records typically pay less for auto insurance, companies with strong records of hiring and retaining workers typically pay less for their Unemployment Insurance (UI) than companies that have high incidents of layoffs and terminations.
The Department of Employment and Economic Development sets rates for every Minnesota company based on past records or sets rates for new companies. In 2013, there are five components to determine the UI for each company:
Base Tax rate - same for all employers. Set at 0.50% of taxable wages for 2013.
Tax rate for new employers – only for new employers. Either 2.5%* or 8.9%**
Additional Assessment – takes effect the following year if the balance in the UI Trust Fund falls below certain levels. 14.00% of tax due.
Workforce Development Assessment – an additional assessment used to retrain unemployed Minnesota workers. 0.10% of taxable wages.
Taxable Wage Base – the amount of wages paid to each employee that are taxable. This is recalculated each year to keep pace with the average wage of Minnesota workers. 2013′s rate is $29,000 per employee per year.
*2.5% is the average of the UI for all Minnesota employers. Is it the rate assigned to new employers who are deemed not to be in high experience rating industries.
**8.9% is the average for all Minnesota employers int he high experience rating industries. These industries include construction, mining, manufacture of concrete, asphalt, road building, repair or resurfacing. This is the rate assigned to new employers in these and other high rate industries.
UI taxes are payable each quarter to the state and follow this calendar for 2013:
|Time Period for Wage Detail
|4th Quarter 2012
||Jan 31, 2013
|1st Quarter 2013
||Apr 20, 2013
|2nd Quarter 2013
||Jul 31, 2013
|3rd Quarter 2013
||Jul – Sept 2013
||Oct 31, 2013
|4th Quarter 2013
||Jan 31, 2014