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Indiana Department of Workforce Development

DWD > Unemployment for Employers > New 2014 Employer Premium Rates New 2014 Employer Premium Rates

Interest Surcharge: Indiana law requires employers to pay a surcharge to fund the annual interest payment due to the federal government on Indiana’s Trust Fund loan. The interest surcharge for 2014 is 3% of your premium. If you wish to estimate your rate, follow the steps below.

First, determine your Premium Rate:

How to Determine Your Premium Rate

Your premium rate will be determined based on the employer’s individual experience account status as of June 30th of each year.

Your premium rate is determined by following steps:

  1. Determine your type of UI premium rate (new employer, new construction employer,  penalty or merit)
  2. Determine your experience rate ratio
  3. Determine your premium rate from the applicable schedule
  4. Determine your Applied Premium Rate (your premium rate multiplied by 1.03 to reflect the interest surcharge)

1. Determine your type of UI premium rate.

There are three types of UI premium rates:

1) NEW EMPLOYER RATE: A new employer rate of 2.5%, government rate of 1.6%, and beginning in 2014, the new construction employer rate of 4% applies unless the following conditions are met. New employers are exempt from the solvency surcharge.

  • You have been subject to paying UI premiums for the past 36 months prior to June 30.
  • You have reporting liability in each of the three 12 month periods immediately preceding June 30.
  • You are not subject to the penalty rate.

2) PENALTY RATE: Any employer, new or merit-rate can be assessed the penalty rate. The penalty rate is your rate as calculated in step 1 or 3 plus 2%. You are subject to the penalty rate if:

  • You fail to file any required quarterly report within 10 days of the specific date requested by Form 1171 (Merit Rate
    Delinquency Notice) sent by certified mail.
  • You fail to pay the premiums, interest and/or penalty charges owed for past quarters within 10 days of the specific date requested by Form 1171 (Merit Rate Delinquency Notice) sent by certified mail.

Important – If you are issued a Merit Rate Delinquency Notice for failure to report a quarter, the liability on the notice will indicate zero with regard to the missing quarter.  The delinquency is not considered resolved unless the report is filed and paid in full by the expiration of the Merit Rate Delinquency Notice.  You will not receive a second opportunity to pay the quarter and avoid being assessed with the delinquent rate.

3) MERIT RATE: Employers that no longer hold new employer status and are not subject to the penalty rate qualify for an experience-based merit rate.

A merit rate is computed based on:

  • Your experience balance as of June 30th
  • Your past 36 months’ payroll

2. Determine your experience rate ratio

Your merit rate is based on the status of your DWD employer experience account. The experience account compares all premiums (contributions) paid into your account and all benefits charged against your account. Be sure to convert to a ratio (percentage) prior to comparing to the appropriate rate chart.

Reserve Ratio =
Experience account credit balance as of June 30
---------------------------------------------------
Total taxable wages paid by the employer/predecessor during the 36 months immediately preceding June 30

 

3. Determine your premium rate from the applicable schedule

Your experience account will have one of the following status designations:

  • Credit reserve balance - Your state UI premiums paid exceed benefits charged to your account. You have a positive experience balance.
  • Debit reserve balance - UI benefits charged to your account exceed state UI premiums paid into your account. You have a negative experience balance.

Be sure to convert to a percentage prior to comparing to the appropriate rate chart.

Rate Schedule for Accounts with a Credit Reserve Balance

 As Much As  But Less Than  Rate %
 3.00   0.50
 2.80  3.00  0.70
 2.60  2.80  0.90
 2.40  2.60  1.20
 2.20  2.40  1.40
 2.00  2.20  1.60
 1.80  2.00  1.80
 1.60  1.80  2.00
 1.40  1.60  2.30
 1.20  1.40  2.50
 1.00  1.20  2.70
 0.80  1.00  2.90
 0.60  0.80  3.10
 0.40  0.60  3.40
 0.20  0.40  3.60
 0.00  0.20  3.80

Rate Schedule for Accounts with a Debit Reserve Balance

 As Much As But Less Than Rate % 
 0.00  1.50   4.90
 1.50  3.00  5.10
 3.00  4.50  5.30
 4.50  6.00  5.50
 6.00  8.00  5.70
 8.00  10.00  6.00
 10.00  12.00  6.40
 12.00  14.00  6.80
 14.00  16.00  7.10
 16.00    7.40

4. Next, determine your Applied Rate:

Determining your applied rate is very easy once you have determined your premium rate.

From step one, determine your rate type.

  • If you are subject to the new employer rate, you are not subject to the solvency surcharge. Your applied rate is 2.5%, or 4% for new construction employers. 
  • If you are subject to the penalty rate, but are also a new employer, you are not subject to the surcharge. Your premium rate is 4.5%, or 6.0% for new construction employers.
  • If you are a merit rated employer, multiply your premium rate above by 1.03 to determine your applied rate.

The interest surcharge for 2014 is 3% of your premium. The charts below convert the premium rate to applied rate for 2014.

Applied Rate Schedule for Accounts with a Credit Reserve Balance

 As Much As  But Less Than Premium Rate  Applied Rate  Penalty Rate 
 3.00    0.50  0.515  2.545
 2.80  3.00  0.70  0.721  2.751
 2.60  2.80  0.90  0.927  2.957
 2.40  2.60  1.20  1.236  3.266
 2.20  2.40  1.40  1.442  3.472
 2.00  2.20  1.60  1.648  3.678
 1.80  2.00  1.80  1.854  3.884
 1.60  1.80  2.00  2.060  4.090
 1.40  1.60  2.30  2.369  4.399
 1.20  1.40  2.50  2.575  4.605
 1.00  1.20  2.70  2.781  4.811
 0.80  1.00  2.90  2.987  5.017
 0.60  0.80  3.10  3.193  5.223
 0.40  0.60  3.40  3.502  5.532
 0.20  0.40  3.60  3.708  5.738
 0.00  0.20  3.80  3.914  5.944

Rate Schedule for Accounts with a Debit Reserve Balance

As Much As  But Less Than  Premium Rate  Applied Rate  Penalty Rate
 0.00  1.50  4.90  5.047   7.077
 1.50  3.00  5.10  5.253  7.283
 3.00  4.50  5.30  5.459  7.489
 4.50  6.00  5.50  5.665  7.695
 6.00  8.00  5.70  5.871  7.901
 8.00  10.00  6.00  6.180  8.210
 10.00  12.00  6.40  6.592  8.622
 12.00  14.00  6.80  7.004  9.034
 14.00  16.00  7.10  7.313  9.343
 16.00  or more  7.40  7.622  9.652