How is my Colorado UI Rate Determined? Why did my rate increase?
How does the State of Colorado determine my rate?
New employers are typically assigned a standard rate based on their industry.
With the exception of new employers, rates are computed by subtracting amount of benefit charges (unemployment claims paid) against your account from all UI premiums paid through July of previous year. This amount is excess which is then divided by average annual payroll from look-back period or 3 fiscal years (for 2015 example July 2011 to June 2014) & this provides CO with your percent of excess. The percent of excess is then used to provide your standard premium rate from rate chart that is on the back of your rate notice.
Example: From July 2013 - June 2014 your prior employees received $8000 in UI payments chargeable to your account. That is the excess amount. Now take that number and divide it by your average annual tax base for the 3 year period July 2011- 2014. Let's say your average annual payroll was $161,500; $8,000 / 161,500 = .0495. 4.95% is your percent of excess. Now find the back of your rate notice and see how that applies to the rate chart. Easy enough? Makes you wonder why you hadn't done that sooner!
Why did my rate increase?
There may be several reasons why your business sees a rate increase. Some of the common reasons include:
- The average annual payroll increased
- There were new benefit charges to the account
- The level of the Unemployment Insurance Trust Fund decreased
- The business stopped paying wages for a period of time and lost its computed rate
Colorado employers that wish to protest their rate must complete this online form and submit it to the state: https://docs.google.com/spreadsheet/viewform?formkey=dHp1b2VLS251WnRXX0c0VDBhMFFWdXc6MQ