How is an experience rating computed?
Similar to your automobile insurance policy, an experience rating is in effect for those employers who have been liable under the law for a sufficient period of time to measure their experience with unemployment. The lower the unemployment benefits an employer’s workers have collected, the lower the employer’s UI rate will be. An experience rating for a given year is based on a 48-month period that ends on June 30 of the previous year. The UI Program divides 125 percent of the unemployment benefits charged to the UI Employer Account by the total taxable wages reported by the employer for the same period. Only taxable wages for which the tax due was paid by September 30 of the preceding year are used. The experience rating is computed to the nearest tenth of a percent. See an example of the calculation immediately below: Reference the Experience Rate Information section of the Employer Handbook for more information.
Similar to an automobile insurance policy, an experience rating is calculated for those employers who have been subject to UI law for a sufficient period of time to measure their experience with unemployment. An experience rating for a given year is based on the 48-month period that ends on June 30 of the previous year. To calculate the experience rating, UI Minnesota divides 125 percent of the unemployment benefits charged to the UI Employer Account by the total taxable wages reported by the employer for the same period. The experience rating is computed to the nearest hundredth of a percent.
