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UNEMPLOYMENT INSURANCE CONTRIBUTION RATES FOR 2005

Wage Base – For tax year 2005, employers pay unemployment taxes

These 20 categories each have an experience factor. The experience

on the first $12,000 of each employee’s gross earnings.

factor is the proportion of the average contribution rate that is payable

by employers in that category.

Experience rating system and tax rates – Each employer’s

contribution rate is determined using the Department of Labor (DOL)

The planned yield is determined from a set of formulas. It is the

“experience rating” system. The employer’s experience rate is

perecntage of total (taxable) wages necessary to generate the desired

determined through multiple factors over time. The rate may be

amount of revenue. The planned yield for 2005 is set in law at 0.70%.

higher or lower than the average employer rate. The rate reflects an

employer’s history of average taxable wages, contributions paid,

The predetermined yield, or average contribution rate, is then

and benefits charged.

computed. It is the average contribution rate needed to generate

the desired amount of revenue for the amount of taxable wages.

Technical explanation of tax rates

Every year, the Reserve Ratio is recalculated for each employer.

The contribution rates for the 20 categories are computed by

This recalculation may or may not result in a rate change.

multiplying the predetermined yield by the experience factors for

each category.

All employers are then arrayed into a list in descending order by

their Reserve Ratios. They are divided into 20 categories with

The lowest contribution rate for 2005 is 0.52% and the highest is

approximately the same amount of taxable wages in each category.

5.40%.

Employers having the least use of the unemployment program at

the top of the list and those with the most use are at the bottom.

EMPLOYER’S 2005 CONTRIBUTION RATE IN PERCENT OF WAGES

Contribution

% of Taxable Payrolls

Experience

Predetermined

Contribution

Category

From

Factors

Yield

Rate

Column A

Column B

Column C

00.00%

05.00%

0.30

1.73%

0.52%

05.01

10.00

0.35

1.73

0.61

10.01

15.00

0.40

1.73

0.69

15.01

20.00

0.45

1.73

0.78

20.01

25.00

0.50

1.73

0.87

25.01

30.00

0.55

1.73

0.95

30.01

35.00

0.60

1.73

1.04

35.01

40.00

0.65

1.73

1.12

40.01

45.00

0.70

1.73

1.21

45.01

50.00

0.75

1.73

1.30

50.01

55.00

0.80

1.73

1.38

55.01

60.00

0.90

1.73

1.56

60.01

65.00

1.00

1.73

65.01

70.00

1.10

1.73

1.90

70.01

75.00

1.25

1.73

2.16

75.01

80.00

1.40

1.73

2.42

80.01

85.00

1.60

1.73

2.77

85.01

90.00

1.90

1.73

3.29

90.01

95.00

2.20

1.73

3.81

20*

95.01

100.00

2.60

1.73

5.40

*Contribution category 20 cannot have a rate less than 5.4%.

New Employer Rate for 2005 = 1.73% Planned yield is .70% for rate year 2005

GENERAL INSTRUCTIONS

Returns must be completed and filed with Maine Revenue Services

The combined Maine Revenue Services and Department of Labor form

each quarter according to the following schedule:

(Form 941/C1-ME) is used to report total income tax withheld for the

quarter, to reconcile 900ME voucher payments made during the quarter, to

Quarter

Period Covered

Due Date

calculate your unemployment insurance contributions for the quarter and

Quarter 1 ............. 01-01-05 to 03-31-05 .......... 04-30-05

to report your employee wage listing for the quarter. You are required to

Quarter 2 ............. 04-01-05 to 06-30-05 .......... 07-31-05

record income tax withheld for each employee.

Quarter 3 ............. 07-01-05 to 09-30-05 .......... 10-31-05

Each quarterly return in this booklet is preprinted with the quarter being

Quarter 4 ............. 10-01-05 to 12-31-05 .......... 01-31-06

reported, Withholding Account Number, Unemployment Contributions

Note: A combined return must be filed each quarter, even if you had no

Employer Account Number, business name(s), calendar period covered and

income tax withheld or unemployment contributions for that period. Each

due date. An extra quarterly return with the quarter being reported and

page submitted must have your Withholding Account Number and your

calendar period covered left blank is provided for use if you make an error

Unemployment Account Number clearly printed at or near the top of the

while you are completing a quarterly return. Returns must be completed

page. Do not write notes on wage listing pages.

and filed with Maine Revenue Services on or before the required due date.

Form 941/c1-Me - Combined Filing For Income Tax Withholding And Unemployment Contributions Page 5

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