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DWD > DWD Employer Services > Employer Premium Rates for 2011 Employer Premium Rates for 2011

On January 1, 2011, new premium rates implemented by the Indiana General Assembly will take affect. Your unemployment insurance (UI) premium rate will be determined based on a combination of the solvency of the UI trust fund and each individual employer’s account status as of June 30th of each year. To determine you premium rate, follow the steps below.

Please note your rate is applicable to the first $9,500 in wages paid to each employee.

How to Determine Your Premium Rate

Your premium rate is determined by following three steps:

1.      Determine the applicable rate schedule

2.      Determine your type of UI premium rate (new employer, penalty or merit)

3.      Determine your experience rate ratio and UI premium rate

1. Determine the applicable rate schedule

The General Assembly has determined that the applicable premium schedule for 2011 will be schedule B.

2. Determine your type of UI premium rate.

There are three types of UI premium rates:

New Employer Rate: A new employer rate of 2.5% or a government rate of 1.0% applies unless the following conditions are met.

1.   You have been subject to paying UI premiums for the past 36 months prior to June 30.

2.   You have some amount of gross wages in each of the three 12 month periods immediately preceding June 30.

3.   You are not subject to the penalty rate.

Penalty Rate: Any employer, new or merit-rate can be assessed the penalty rate. You are subject to the penalty rate if:

1.      You fail to file any required quarterly report.

2.      You fail to pay the premiums, interest and/or penalty charges owed for past quarters within 10 days of the specific date requested by Form 1171 (Merit Rate Delinquency Notice) sent by certified mail.

3.      You fail to pay the premiums, interest and/or penalties charges owed by a predecessor account within ten days of the specific date requested by Form 1171 (Merit Rate Delinquency Notice) sent by certified mail.

Merit Rate: Employers that no longer hold new employer status and are not subject to the penalty rate qualify for an experience-based merit rate.

A merit rate is computed based on:

Your own account status as of June 30th

Your past 36 months’ payroll

3. Determine your experience rate ratio and premium rate

Your merit rate is based on the status of your DWD employer experience account. The experience account compares all premiums (contributions) paid into your account and all benefits charged against your account.

Your experience account will have one of the following status designations:

Credit reserve balance - Your state UI premiums paid exceed benefits charged to your account

Debit balance – UI benefits charged to your account exceed state UI premiums paid into your account.

If you have a credit reserve balance, the credit reserve ratio will determine your merit rate. If you have a debit balance, the debit reserve ratio will determine your merit rate. These ratios are discussed below.

 

Credit Reserve Ratio =

Experience account credit balance
as of June 30

---------------------------------------------------
Total taxable wages paid by the
employer/predecessor during the 36 months immediately preceding June 30

 

Next, use the credit reserve ratio (above) and the rate schedule to find your applicable merit rate in the chart below.

Rate Schedule for Accounts with Credit Balances as of January 1, 2011

Debit Balance Accounts

Debit Reserve Ratio =

Experience account debit balance
as of June 30.

---------------------------------------------------
Total Taxable wages paid by the
employer/predecessor during the 36 months immediately preceding June 30.

Next, use the debit reserve ratio (above) and the rate schedule to find the applicable merit rate in the following chart.

Rate Schedule for Accounts with Debit Balances as of January 1, 2011

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