Unemployment tax rates for Oregon employers will remain at tax schedule three for 2019. Tax schedule three includes an average rate of 1.97% for the first $40,600 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.
Oregon adjusts employer tax rates annually using eight tax schedules based on the solvency of the Unemployment Insurance Trust Fund. Movement between the eight schedules of tax rates represents part of the self-balancing aspects of Oregon’s Unemployment Insurance Trust Fund law. Each September, a formula contained in statute, determines how much should be collected during the next year to maintain a solvent fund. Each schedule has a range of tax rates based on an employer’s previous unemployment insurance experience. Employers with more unemployment insurance claims have a higher tax rate than those with fewer claims.
Oregon’s unemployment rate continues a downward trend in 2018. The low number of unemployed workers reflects a very tight job market. This creates some challenges for employers maintaining their workforce, but means that there are far fewer Oregonians who are unable to find a job. The Oregon Employment Department mailed notifications to businesses last week regarding their individual tax rates and encourages employers to wait until they receive their individual notice before attempting to contact the department with questions.
Nonprofits Have Other Options
The above applies to most Oregon employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes – high or low. Even with decreases in unemployment insurance taxes, many organizations are overpaying their unemployment liability. Recent analysis of 501(c)(3) employers reveals that 86% are overpaying into their state unemployment insurance program.
You can calculate your organization’s unemployment insurance overpayment at http://www.501c.com/overpayments/.
Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.