Calculating an Employer's UI Contribution Rate

An employer's New York State Unemployment Insurance contribution rate is divided into two parts - the normal, and the subsidiary, contribution.

The amount of money in the U.I. Trust Fund determines the employer's normal contribution rate while the balance in the General Account determines the subsidiary contribution rate. Both of these contributions are experience rated, meaning they are dependent upon the individual employer's unemployment experience.

The normal part of the rate can vary. When an employer first becomes liable for U.I. without being a successor to a liable employer, the new employer contribution rate is assigned. This rate is fixed each year according to the size of the Unemployment Insurance Trust Fund. This rate cannot exceed 3.4%. For 2024, the new employer normal contribution rate is 3.4%.

The subsidiary part of the rate can vary. When an employer first becomes liable, without being a successor to a liable employer, the subsidiary rate assigned is a rate for an account percentage of 0.0% but less than 5.5%. For qualified employers, the subsidiary rate assigned is based on their account percentage. Locate the appropriate rate column in the subsidiary contribution rate table.

An employer who is liable for five quarters or more before a rate computation date (Dec. 31st), will qualify to receive a rate based on their U.I. experience. An account balance is maintained for each employer as a bookkeeping device to calculate rates, which equals the normal contributions paid in a timely manner minus any benefits paid to former employees that have been charged to the employer's account. This balance is divided by the employer's five year average payroll subject to contribution. If the employer has been liable for less than 5 years, the average will be computed from the initial date of liability to the end of the last payroll year. The result is called the account percentage, and depending upon the Size of Fund Index, which considers the conditions of the Unemployment Insurance fund, will correspond to a particular normal rate on the UI contribution rate table.

A Benefit Equalization Factor can also affect the employer's rate from the fifth quarter through the twenty-first quarter of liability, if the account is positive. This factor is a mathematical calculation that creates a graduated rate reduction for newer employers. This is done to give new employers an equal opportunity with established employers to earn rate reductions.

Two other situations can affect an employer's contribution rate.

First, if the employer has a negative account balance that is more than 21% of their current payroll year wages, the employer is rated on their negative account percentage the first year, then assigned the maximum normal rate in the appropriate Size of Fund Index column for the following three years.

Second, an employer may qualify for a "stable employment" benefit. This benefit applies when a qualified employer's account percentage is negative on the computation date, and the employer's preceding payroll year wages are greater than or equal to 80% of the employer's three-year average. In such a case, the employer's account percentage for the next year is improved by four percentage points for the purposes of determining the employer's rate. However, if the benefit is applied to the employer's account percentage, that employer's normal rate cannot be less than 6.1%.

If you have any further questions concerning how your UI contribution rate is determined, please call the Employer Account Adjustment Section. Have your New York State Employer Registration Number available.