Unemployment Kick in the Shorts
The Oklahoma Employment Security Commission has released the new wage limit and rates for 2011. The new rates for 2011 range from .3% to 7.5%, up from .1% to 5.5% in 2010. The wage base increases from $14,200 to $18,600.
So, what does this mean to you as a business owner? It means that more of your money will be going toward unemployment tax next year. Our state has fared well during the recent downturn in the economy, but this will impact a significant number of businesses.
Best Case Scenario:
If your business was paying the lowest amount possible (.1% in 2010), and assuming that all of your employees were paid more than $14,200, then you paid $14.90 per employee during 2010 in unemployment tax. For 2011, you will pay $55.80 per employee for unemployment tax. That is an increase of $40.90, or 275% per employee! Keep in mind that is the best case scenario.
Worst Case Scenario:
If your business was forced to lay off employees during the past few years, you may find yourself paying the highest possible rate. For 2010, at a rate of 5.5%, you paid $781 per employee for unemployment tax. In 2011, if your rate stays at the highest rate of 7.5%, you will pay $1395 per employee! That is an increase of $614 or 79%. If you have 10 employees, you will pay almost $14,000 in unemployment tax during 2011
The Somewhere in Between Scenario:
Let’s assume that most businesses are going to fall somewhere in the bottom range of the scale. If your rate in 2010 was 1.8%, then you paid $255.60 per employee. If your rate had a modest escalation to 2.0% for 2011, with the new wage limit, you will pay $372 per employee. That is a 46% increase between the two years.
To oversimplify, we need to create jobs and put people back to work. We all will have to shoulder the unemployment tax bill, which in reality is a small part of the unemployment issue. Let’s hope for a better 2012!
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