Uncovering savings with specialized expertise
26 states currently allow contributory (unemployment tax paying) employers to make a voluntary tax contribution to their experience rated unemployment tax account increasing the reserve of the account balance, which can reduce their unemployment tax rate for that calculation year. It may be feasible for the employer to derive a net savings by making that voluntary tax payment and pay at the lower unemployment tax rate over your employee population under that unemployment account for the calculation year. Simply stated, you can buy down your tax rate and derive a net savings.
Many states allow employers to make the mathematical calculation all the way down the unemployment tax rate table presenting a multitude of scenarios and options. It is not always feasible to derive a net gain when analyzing voluntary contributions. Employers Edge analyzes the viability of making voluntary contributions for all of our customers' unemployment tax accounts in the 26 applicable states and makes a detailed recommendation for accounts that deliver financial benefit.