2018 Tax Rates for Utah Businesses
The majority of Utah’s employers will see a reduction in their unemployment insurance tax rates for the 2018 calendar year. In 2018, more than 75 percent of Utah's established employers will qualify for the minimum contribution rate of approximately $34 per employee per year — a 48 percent decrease from 2017. Utah’s taxable wage base increased from $33,100 to $34,300 over the past year.
Provided below are the computations used to determine the maximum weekly benefit amount, monetary eligibility requirement, and taxable wage base as specified in Sections 35A-4-401(2)(b)(ii), 35A-4-208(2), and 35A-4-201(11), (12) and (16) of the Utah Employment Security Act. For claimants who establish benefit years on or after Jan. 1, 2018, the maximum weekly benefit amount will be $543 and the monetary eligibility requirement will be $3,700. The taxable wage base, effective Jan. 1, 2018, will be $34,300.
Fiscal Year 2017
July 1, 2016 – June 30, 2017
- Total insured wages: $62,678,267,257
- Average insured employment: 1,374,000
- Average annual wage (Line 1/ Line 2): $45,617.37
- Average weekly wage (Line 3/ 52): $877.26
- Maximum Weekly Benefit Amount: $543.00
(62.5% of Line 4 minus $5 disregarding any dollar fraction)
- Monetary Eligibility Requirement: $3,700.00
(8.0% of Line 3 rounded to the next higher multiple of $100)
- Taxable Wage Base: $34,300.00
(75% of Line 3 rounded to next higher multiple of $100)
Data collected to determine the total insured wages and average insured employment is available upon request.
Employers whose former employees were eligible for and received unemployment insurance benefits will see an adjustment in their 2018 contribution rates compared to 2017, with rates ranging from 0.1 percent to 7.1 percent. New employers will pay an industry average, ranging from 1.1 percent to 5.5 percent.
“Proper calculation of the tax rate is critical to help ensure Utah’s Unemployment Insurance Trust Fund remains solvent during times of high unemployment and to ease the tax burden on employers to encourage economic growth,” said Kevin Burt, director of the Unemployment Insurance Division. “Utah’s program is implemented well by our Unemployment Insurance staff, who work diligently to ensure that only eligible individuals receive the unemployment insurance benefit, and who will continue to support both employers and claimants in understanding and following the rules of the program.”
Unemployment Insurance in Utah
Unemployment Insurance is a joint state and federal program that provides cash benefits to eligible workers. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law. Unemployment insurance payments (i.e., benefits) are intended to provide temporary financial assistance to individuals who are unemployed through no fault of their own.
Unemployment Insurance Trust Fund
Workforce Services is responsible for collecting state unemployment insurance taxes from Utah employers. The taxes collected are deposited into the Unemployment Insurance Trust Fund. In turn, unemployment insurance benefits for eligible workers are paid out of the Trust Fund. The Utah employer tax rate is calculated annually by Workforce Services.
Tax Rate Calculation
Workforce Services is responsible for the tax rate calculation and monitors the adequacy of the Trust Fund, while also determining the amount of social costs that must be recovered. Utah uses a charge back system to calculate the tax rate, meaning employers whose former employees have received unemployment insurance benefits are more likely to have a higher tax rate than those employers whose former employees do not have experience with unemployment insurance benefits.
Social costs are the unemployment insurance benefit costs paid out to former employees that cannot be charged back to a specific employer through taxes the following year (e.g., an employer who has gone out of business) and are thus shared equally by all Utah employers.
Proper calculation of the tax rate:
- Ensures the Trust Fund remains solvent during times of high unemployment
- Can ease the tax burden on employers, allowing them to reinvest in their employees or expand their business resulting in economic growth
For calendar year 2017, Utah is projected to collect $187 million in unemployment insurance taxes, which is approximately $170 million less (a 47 percent reduction) than the amounted collected in 2013. The total unemployment insurance taxes collected by Workforce Services will decrease for the fourth consecutive year.
Annually, the U.S. Department of Labor produces the “State UI Trust Fund Solvency Report.” This report provides information necessary for analyzing the solvency level of each state’s trust fund. The 2017 report shows Utah’s Trust Fund as the fourth healthiest trust fund in the nation. In addition, according to the report, 32 of the 53 states and U.S. territories have a trust fund reserve below the recommended level, potentially risking insolvency during times of economic recession.
Workforce Services’ Unemployment Insurance staff have and will continue to work diligently to ensure that Utah’s Trust Fund remains healthy, while also ensuring the employer tax rate is such to support both employers and continued economic growth.
For more information about the tools Workforce Services provides employers to assist with filing taxes and other required reports visit our Unemployment Insurance Employer page.