Tax Rates

This section contains information on the Division of Employment Security's calculation of rates for Missouri unemployment tax. Scroll down for a general explanation of tax rates, or choose a topic for additional or more detailed information.

• Beginning Tax Rates
• New Employer Rate Table
• Experience Rate
• Reimbursable Employers
• SUTA Dumping
• Benefit Charges for Contributory and Reimbursable Employers

General Explanation

All employers, except those making reimbursable payments, have an assigned tax rate. An employer's rate may change each year. The Division calculates the tax rates for all employers.

For its first two or three years, an employer receives the new employer rate. This is a rate assigned to all new employers of the same industrial classification. Eventually an employer becomes eligible for an experience rate. This is a rate calculated based on the ratio between an employer's average annual taxable payroll, unemployment claims against its account, and taxes paid in previously by the employer.

Account Number

The Division is required to establish and maintain a separate experience rate account for each employer. The account number contains 14 digits as follows: 000000-0-000-0000. The first six digits identify the account. The seventh digit is changed when an ownership change occurs.

Maximum Rate Surcharge

If an employer has been at the maximum rate for two consecutive years, a surcharge of one-quarter percent is added to the rate. In the event that an employer remains at the maximum rate for a third or subsequent year, an additional surcharge of one-quarter percent shall be added each year to the annual rate calculation up to one percent. If an employer continues to remain at the maximum rate, an additional surcharge of one-half percent shall be added. In no case shall the surcharge exceed one and one-half percent in any given year.

Contribution Rate Adjustment (CRA)

A contribution rate adjustment is a percentage increase or decrease that is based on the cash balance of the Unemployment Trust Fund.  Rates are increased by 10%, 20% or 30%, or reduced by 7% or 12%.

Unemployment Automation Fund and Surcharge

Effective August 28, 2008, the "Unemployment Automation Fund" was established as provided in Section 288.312, RSMo. This fund is to be used solely for the purpose updating the division's automated systems to improve the administration of the state's unemployment insurance program.

As provided in Section 288.131, the fund will be financed by an automation surcharge paid by established employers. The automation surcharge rate will be five one-hundredths of one percent or less. Any employer who is subject to this automation surcharge will have their normal unemployment insurance tax rate REDUCED by five one-hundredths of one percent. This reduction will be shown on the employer's unemployment insurance tax rate statement that is mailed to the employer in November. The automation surcharge will be based on the employer's total taxable wages for a twelve month period ending on June 30th of the previous year. Employers with a zero contribution rate are exempt from the automation surcharge. Each employer will be notified of the amount of their automation surcharge on the first quarter contribution report. The automation surcharge is in effect for calendar years 2009, 2010 and 2011. Contributions to the automation surcharge will not be used for future rate calculations nor will they be reportable to the Internal Revenue Service on Form 940 as contributions paid.

SUTA Dumping

State Unemployment Tax Act (SUTA) dumping refers to attempts by employers to pay lower state unemployment taxes than their experience allows. SUTA dumping practices include shifting payroll from an account with a higher rate to an account with a lower rate and various restructuring schemes to obtain beginning or lower tax rates. The Missouri Employment Security Law bans these practices by mandating transfers of experience in certain situations and prohibiting transfers of experience in others.  In addition, the law also requires the Division to impose substantial penalties on those who knowingly engage in SUTA dumping activities.

If an individual, organization or employing unit knowingly violates or attempts to violate the Employment Security Law related to determining the assignment of a contribution rate, or knowingly advises another in a manner that results in a violation of such provision, the individual, organization, or employing unit shall be subject to the following penalties:

• If an employer, then for the current year and the three rate years immediately following the current rate year, such employer’s base rate shall be the maximum base rate applicable to such type of employer, or the employer’s current base rate plus two percent, whichever is greater;
• If not an employer, such individual, organization, or employing unit shall be subject to a civil monetary penalty of not more than $5,000.

In addition, any violation may be prosecuted for fraud.