Employer Contribution Tax Rates 101 - For Employers
There are many things employers must complete in order to be in compliance with the state. This includes contributing to the Missouri Unemployment Tax Fund. Each quarter, employers may contribute to the fund and must provide the Division of Employment Security (DES) with information on the wages of their covered employees.
The DES establishes and maintains separate experience rate accounts for each employer. All employers, except those making reimbursable payments, have an assigned tax rate. An employer's rate may change from year to year.
However, there are several ways employers can keep tax rates low:
- Employers must file Quarterly Contribution and Wage Reports on time each quarter to avoid costly late penalties on their account. To see due dates for each quarter and for more information on Quarterly Contribution and Wage Reports, visit the Quarterly Reports page.
- Another way to keep tax rates low is to properly classify employees. Worker misclassification occurs when employers fail to report employees by paying them under the table or paying in cash, or by classifying them as independent contractors. By properly classifying and reporting workers, employers avoid penalties associated with 1099 Fraud. To avoid misclassifying your workers, you can learn more about Are You Off The Books and take an online assessment. The Department also provides free educational training to businesses that have questions about misclassification.
- Limiting layoffs can also affect employer unemployment tax rates. Employers can avoid laying off workers by signing up for the Shared Work Program. The program allows employers to divide available work among a specified group of affected employees instead of a layoff. Employees can then receive partial unemployment benefits while working reduced hours. If you are facing layoffs, you can now submit a plan application online!
- Be sure to provide information about a former employee to the DES when requested. This will help determine whether or not a claimant is eligible for benefits, which could have an impact on your tax rate.