Employer Tax Rate Changes: 1/31 Notice & Explanation

In December the unemployment tax rates for many employers shifted to a higher level. While this is not unexpected and occurred last year at this time, we thought it important to give you further explanation and contact information should you have further questions. 

Why did the tax tables change?

  • The Trust Fund balance is read two times a year; on June 30 and December 31. The balance of the Trust Fund is the sole determination of which one of six Premium Rate Tables is used for the following six month period.
  • Tenn. Code Ann. § 50-7-403 (2014) explains all the premium requirements. 
  • The Tennessee Employment Security Law provides for six premium rate tables. 

    The automatic  "trigger amounts" for the tables are as follows:

Table 1 Trust Fund = below $450 million

Table 2  Trust Fund = $450 million but < $525 million

Table 3  Trust Fund = $525 million but < $650 million

Table 4  Trust Fund = $650 million but < $750 million

Table 5  Trust Fund = $750 million but < $850 million
(Balance of February 15, 2015 is $819,800,297)

Table 6  Trust Fund over $850 million

The “reserve ratio” of an employer does not change in relation to the Trust Fund balance. It is determined by the premiums paid and benefits related to each individual employer’s account .

Tennessee employers can find out more information about their unemployment taxes by calling Employer Taxes at (615) 741-2486.

ATTACHED - Rate table change notices sent to employers 1/31/15 and the current tax table.

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