Form Rt-800002 - Employer Guide To Reemployment Tax (Page 14 of 18) in pdf

Florida through whom such records may be obtained

Once rated, an employer’s tax rate may vary each

upon request. Failure to produce all requested

year according to their employment experience.

work records will result in the loss of an employer’s

The tax rate can vary from the maximum of 5.4

earned tax rate and the assignment of the standard

percent (.0540) to the minimum rate which varies

rate (5.4%) until the quarter after production of the

every year based on the adjustment factors.

records.

Employers participating in an approved Short-Time

Compensation Plan are subject to a rate of 1.0

The Florida Administrative Code outlines the specific

percent (.01) above the current maximum rate. Even

information an employer is required to maintain in the

though an employer may no longer be participating

payroll records. The types of records needed for an

in the program, all benefits charged as a result of

audit may include, but are not limited to: time cards,

Short-Time Compensation will be used in the tax

individual earnings records, check registers, check

rate computation.

stubs, canceled checks, cash disbursement journals,

payroll ledgers, payroll summaries, petty cash,

Economic conditions resulting in abnormally high

work orders/invoices, master vendor files, general

unemployment accompanied by high benefit

journals, general ledgers, income statements,

charges cause a severe drain on the Unemployment

balance sheets, RT-6s (SUTA), Form 940 (FUTA),

Compensation Trust Fund. The effect is an increase

Forms 941, 942, 943 (as applicable), Forms W-2

in the adjustment factors, which in turn increases

and W-3, Forms 1099 and 1096, Schedule C (sole

tax rates for all rated employers. Conversely,

proprietor), Form 1065 (partnership), partnership

when unemployment is low, the adjustment factors

agreements, Form 1120 and all attachments (C

decrease and tax rates for rated employers are

Corporation), Form 1120S and all attachments

reduced accordingly.

(S Corporation), corporate charters, independent

When an employer first becomes liable for the

contractor agreements, and charts of accounts.

payment of reemployment taxes, the beginning tax

An employing unit may be held liable as an employer

rate is 2.7 percent (.0270) until the employer has

regardless of the number of workers employed.

reported for approximately ten quarters, depending

Adequate payroll records will reveal whether the

on the quarter of the year the employer established

employer has or has not met liability criteria for the

liability. The account will then be rated by dividing

the benefits charged to the account by the taxable

payment of reemployment taxes.

payroll on which wages were reported by the end

Tax Rate

of the quarter preceding the quarter in which the

tax rate is to be computed. Once an account has

Regular

completed the required quarters of reporting, it will

The method of determining varying tax rates

then be considered for an experience rate at the

assigned to taxpaying employers is referred to

beginning of each calendar year thereafter.

as “experience rating.” Under the reemployment

The payroll used in annual rate computations may

assistance program law, an employer’s experience

vary from seven to twelve calendar quarters. The tax

rate is based on the employer’s own employment

rate is computed using the sum of three factors:

records in relation to the employment records of all

•

Benefit ratio.

other employers.

•

Variable adjustment factor.

The purpose of the experience rating provision is to

•

Final adjustment factor.

keep the Unemployment Compensation Trust Fund

at a stabilized percentage of the taxable payrolls

To obtain the variable adjustment factor, the benefit

reported by all employers. The experience rating

ratio is multiplied by a common multiplier, which

provision also helps make sure employers pay their

varies from year to year. The final adjustment factor,

fair share based on their own experience rating.

which also varies from year to year, is the same

Variable adjustment factors and constant adjustment

for all employers and ultimately determines the

factors are computed yearly. These factors are used

minimum rate for the year.

to help compensate the trust fund for the benefits

Reemployment Tax Rate Notices (RT-20) are mailed

paid to eligible claimants who worked for employers

to employers immediately prior to the new tax rate

whose taxes were less than the amount of benefits

effective date. A protest of the assigned tax rate

paid, and benefit payments which are not chargeable

must be in writing, within 20 days from the date the

to any employer’s account. These charges are

Reemployment Tax Rate Notice is mailed.

distributed to all rated employer accounts.

Department of Revenue, Employer Guide to Reemployment Tax, Page 14

Form Rt-800002 - Employer Guide To Reemployment Tax Page 14

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