Unemployment tax rate to remain same

Wednesday, Dec. 3, 2008 | 6:17 p.m.

CARSON CITY – Despite the rising number of people who are jobless, Nevada businesses won’t get hit with a higher unemployment tax rate next year.

Cynthia Jones, director of the state Division of Employment Security, has decided employers will continue to contribute an average 1.33 percent of the wages paid to workers.

The money collected goes into a trust fund to pay benefits to the unemployed.

The fund started at $803 million at the beginning of this year but has dipped to $754 million and is expected to drop to $492.1 million or $77.5 million below the solvency level.

But Jones said the average tax rate will remain the same “to avoid placing any additional burden on employers.”

There are an estimated 60,000 employers and their assessments range from a low of 0.25 percent to 5.40 percent for employers with the worst turnover rates.

New businesses pay 2.95 percent for several years until they get an experience rating of turnover.

Jones said about 33,000 or 53 percent of Nevada employers are eligible for experience ratings. And of those about 46 percent will contribute the lowest rate of .25 percent.

Employers only pay taxes on the first $25,400 earned by a worker starting Jan. 1, 2009.

The division will release the jobless rate on Friday. The last monthly report showed it at 7.3 percent, the highest it’s been in 23 years. The division is predicting it may grow to 8.5 percent next year.