Unemployment Insurance Tax
Unemployment Insurance is a federal-state program developed in the 1930's.
Unemployment Insurance is exactly as the name implies - insurance. Benefits are paid to lighten the burden of unemployment to the unemployed individual, to maintain purchasing power in the community and to allow laid-off employees to remain located n the area so they will be available for re-employment. The program is designed to help stabilize the economy by preventing a sharp drop in consumer spending during periods of unemployment.
Montana's Unemployment Insurance program is financed by employers through a payroll tax. Employers pay the contribution tax based on gross wages paid to their employees for services performed in Montana.
The Unemployment Insurance contribution rate varies depending on the employer's industry and experience rate. Employers are also liable for paying an administrative fund tax, which, for most employers, is computed at 0.13% of taxable payroll. Governmental agencies and non-profit organizations who elect to reimburse the Unemployment Insurance trust fund pay the administrative fund tax at 0.05% of total payroll.
