Tax Rates

This section contains information on the Division of Employment Security's calculation of rates for Missouri unemployment tax. Scroll down for a general explanation of tax rates, or choose a topic for additional or more detailed information.

• Beginning Tax Rates
• New Employer Rate Table
• Experience Rate
• Reimbursable Employers
• SUTA Dumping
• Benefit Charges for Contributory and Reimbursable Employers

General Explanation

All employers, except those making reimbursable payments, have an assigned tax rate. An employer's rate may change each year. The Division calculates the tax rates for all employers.

For its first two or three years, an employer receives the new employer rate. This is a rate assigned to all new employers of the same industrial classification. Eventually an employer becomes eligible for an experience rate. This is a rate calculated based on the ratio between an employer's average annual taxable payroll, unemployment claims against its account, and taxes paid in previously by the employer.

Account Number

The Division is required to establish and maintain a separate experience rate account for each employer. The account number contains 14 digits as follows: 000000-0-000-0000. The first six digits identify the account. The seventh digit is changed when an ownership change occurs.

Surcharge

If an employer has been at the maximum rate for two consecutive years, a surcharge of one-quarter percent is added to the rate. In the event that an employer remains at the maximum rate for a third or subsequent year, an additional surcharge of one-quarter percent shall be added each year to the annual rate calculation up to one percent. If an employer continues to remain at the maximum rate, an additional surcharge of one-half percent shall be added. In no case shall the surcharge exceed one and one-half percent in any given year.

Percentage Increase/Decrease

A percentage increase/decrease is based on the cash balance of the Unemployment Trust Fund and increases rates by 10%, 20% or 30%, or reduces rates by 7% or 12%.

For calendar years 2005, 2006 and 2007, the contribution rate of any employer who is paying the maximum contribution rate shall be increased by 40% instead of 30%.

SUTA Dumping

State Unemployment Tax Act (SUTA) dumping refers to attempts by employers to pay lower state unemployment taxes than their experience allows. SUTA dumping practices include shifting payroll from an account with a higher rate to an account with a lower rate and various restructuring schemes to obtain beginning or lower tax rates. The Missouri Employment Security Law bans these practices by mandating transfers of experience in certain situations and prohibiting transfers of experience in others.  In addition, the law also requires the Division to impose substantial penalties on those who knowingly engage in SUTA dumping activities.

If an individual, organization or employing unit knowingly violates or attempts to violate the Employment Security Law related to determining the assignment of a contribution rate, or knowingly advises another in a manner that results in a violation of such provision, the individual, organization, or employing unit shall be subject to the following penalties:

• If an employer, then for the current year and the three rate years immediately following the current rate year, such employer’s base rate shall be the maximum base rate applicable to such type of employer, or the employer’s current base rate plus two percent, whichever is greater;
• If not an employer, such individual, organization, or employing unit shall be subject to a civil monetary penalty of not more than $5,000.

In addition, any violation may be prosecuted for fraud.