Employer Tax Rate to Decrease in 2015, Nov. 17

Unemployment tax rates for most Oregon employers will decline January 1, 2015. Employers that pay into the system will move from Schedule 6 to Schedule 5, saving the average Oregon employer about $63 per employee annually. Tax Schedule 5 includes an average rate of 2.53% for the first $35,700 paid to each employee. The specific rate each employer will pay under the new schedule depends on how much they have used the unemployment insurance system. During the recession, 36 states depleted their trust funds to the point of needing to borrow money to cover unemployment insurance benefit payments. Businesses in many of those states face tax surcharges or reductions in federal tax credits. Due to Oregon’s self-balancing formula, the state’s trust fund has maintained an adequate level despite record unemployment insurance payments. Oregon law requires the Employment Department to use a statutory formula to determine employer payroll tax rates for the upcoming year. These taxes go into the unemployment insurance trust fund used to pay unemployment benefits. At its lowest point, the trust fund had a balance of $700 million, but as of November 1, 2014, the balance stood at just over $2.2 billion.