What is a benefit ratio?
The benefit ratio is defined as the total benefits charged to an employer’s account in the previous seven years divided by the employer’s taxable payroll over that same period. A higher benefit ratio indicates a greater use of the system and thus results in higher tax rates for that employer. Employers that have less than seven years of experience but more than one year will have their benefit ratio based on the number of years for which they have been liable employers. Employers’ benefit ratios for 2011 are based on the firms’ experience between July 1, 2003 and June 30, 2010.
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