This week’s question comes from Josh, a company owner. We’re paying more in state unemployment tax this year than we have in the past. Even though we didn’t lay anyone off, our DUA experience rate increased from last year. How is our Massachusetts DUA experience rate determined? Answer: The DUA Experience rate is determined by the Massachusetts Division of Unemployment Assistance (DUA), which is headquartered in Boston. The DUA also has career centers throughout the state including Attleboro, Brockton, Cambridge, Everett, Fall River, Gardner, Gloucester, Greenfield, Haverhill, Holyoke, Hyannis, Lawrence, Leominster, Lowell, Lynn, Marlboro, Milford, New Bedford, Newtonville, Northampton, Norwood, Pittsfield, Plymouth, Quincy, Salem, Southbridge, Springfield, Taunton, Wareham, Woburn, and Worcester.
DUA Account Is a Record of Four Types of Adjustments
The DUA maintains an individual account for every employer required to pay unemployment insurance contributions. The account balance is an accumulation of the following four types of adjustments:
- The employer’s wages subject to contribution,
- The contributions actually paid by the employer,
- The unemployment insurance benefits charged to the employer, and
- Any account balance adjustment.
Computation Year Runs from October 1 To September 30
The account also provides an opening and a closing balance for the computation year (October 1 through September 30). An account balance carries over from year to year as long as the employer is required to file quarterly reports.
Account Balance Is Used to Determine Contribution Rate
DUA uses each employer’s account to determine an annual contribution rate for that employer. The experience rating process is the method used to determine the rate.
September 30 Is the Computation Date
The last day of each fiscal year, September 30, is called the “computation date” when an employer account is closed to compute the rates for the following calendar year. Contributions paid in October are credited to the employer’s account as if paid in September.
Vision Payroll Will Provide Further Information on the Experience Rating System
Over the next several weeks, Vision Payroll will provide further information on the experience rating system. Contact Vision Payroll if you have specific questions about the experience rating system that you would like to have addressed.