Rate Insert

Unemployment Insurance Tax Rates for 2017

The rate schedule for each calendar year is based on the Unemployment Insurance Trust Fund balance as of October 31, divided by the total wages paid to all employees covered under Unemployment Insurance for the previous state fiscal year.  The resulting ratio determines which of the eleven schedules will be in effect for the year. Schedule I, will be in effect for 2017.

Each employer is assigned a contribution rate based on their reserve ratio, which is contributions paid minus benefits charged since October 1, 1981, divided by average annual taxable payroll for the prior three fiscal years ending September 30.  All employers are arranged from the highest positive reserve ratio to the highest negative reserve ratio. The highest positive reserve ratio is assigned the lowest contribution rate.  The rate class that the reserve ratio falls into determines individual rates. 

The 2017 reserve ratios assigned to each rate class are listed below. Employers in eligible rate class 1 and 2 have a 0.00% contribution rate and an Administrative Fund Tax (AFT) rate of 0.13% for a total Tax Rate of 0.13%.  An Administrative Fund Tax (AFT) of 0.18% is assigned to all other employers in addition to their contribution rate. The total rate is the contribution rate plus the AFT rate.

 

Eligible Employers

Positive Reserve Ratio of:

 

Rate Class

 

Contribution Rate

 

AFT Rate

 

Total Rate

 

 

 

 

 

 

 

 

 

0.157322 to 999.999999

 

Eligible 1

 

0.00%

 

+0.13%

=

0.13%

0.144445 to 0.157321

 

Eligible 2

 

0.00

 

+0.13

=

0.13

0.139359 to 0.144444

 

Eligible 3

 

0.02

 

+0.18

=

0.20

0.136141 to 0.139358

 

Eligible 4

 

0.22

 

+0.18

=

0.40

0.131593 to 0.136140

 

Eligible 5

 

0.42

 

+0.18

=

0.60

0.125592 to 0.131592

 

Eligible 6

 

0.62

 

+0.18

=

0.80

0.115323 to 0.125591

 

Eligible 7

 

0.82

 

+0.18

=

1.00

0.097406 to 0.115322

 

Eligible 8

 

1.02

 

+0.18

=

1.20

0.064533 to 0.097405

 

Eligible 9

 

1.22

 

+0.18

=

1.40

0.000000 to 0.064532

 

Eligible 10

 

1.42

 

+0.18

=

1.60

 

Deficit Employers

Negative Reserve Ratio of:

 

Rate Class

 

Contribution Rate

 

AFT Rate

 

Total Rate

 

 

 

 

 

 

 

 

 

-0.000001 to -0.005001

 

Deficit 1

 

2.92%

 

+0.18%

=

3.10%

-0.005002 to -0.013675

 

Deficit 2

 

3.12

 

+0.18

=

3.30

-0.013676 to -0.036390

 

Deficit 3

 

3.32

 

+0.18

=

3.50

-0.036391 to -0.074278

 

Deficit 4

 

3.52

 

+0.18

=

3.70

-0.074279 to -0.114898

 

Deficit 5

 

3.72

 

+0.18

=

3.90

-0.114899 to -0.182155

 

Deficit 6

 

3.92

 

+0.18

=

4.10

-0.182156 to -0.229570

 

Deficit 7

 

4.12

 

+0.18

=

4.30

-0.229571 to -0.401638

 

Deficit 8

 

4.32

 

+0.18

=

4.50

-0.401639 to -0.745580

 

Deficit 9

 

4.52

 

+0.18

=

4.70

-0.745581 to -999.999999

 

Deficit 10

 

6.12

 

+0.18

=

6.30

 

2017 Taxable Wage Base is $31,400

The taxable wage base for 2017 is $31,400, which is 80% of the 2015 average annual wage in Montana.  All experience rated employers have the same taxable wage base.

 

Frequently Asked Questions

The most commonly asked questions by employers after receiving an Unemployment Insurance Contribution Rate Notice are: 

 

Q:  Why did my tax rate go up?

There are several reasons why the rate may go up. The most common reasons are:

  • An increase in benefit charges to your account will decrease your reserve ratio and cause your rate to increase;
  • An increase in your taxable wages from one year to the next may cause your reserve ratio to go down, and a decrease in your reserve ratio will usually cause your rate to increase;
  • Converting/changing from a new employer rate based on the industry average to an experience-rated employer based on your own experience may result in an increase to your rate.

The rate may go up as a result of one or a combination of the above.

 

Q:  My rate notice shows a 0.00% contribution rate.  Is this correct?

Yes, employers who have paid in more contributions than benefit charges and fall into eligible rate class 1 and 2 will be assigned a 0.00% rate.

 

Q:  How do the 2017 UI rates compare with 2016?
In 2016, Montana was on rate schedule I, and in 2017, Montana will remain on rate schedule I. This is the lowest possible rate schedule.

 

Q:  What is a Penalty Rate?

Employers who have a balance due or have not filed all reports when rates are calculated in December will receive a “penalty rate”.  A penalty rate is 50% higher than the computed rate.  To avoid a penalty rate, an employer must pay all tax, penalty and interest due and file delinquent reports with payment of tax, late file penalties and interest by January 12, 2017.

 

For more information on 2017 UI rates, go to http://uid.dli.mt.gov/