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

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

Florida through whom such records may be obtained

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, but

records.

can never be lower than .1 percent (.0010).

Employers participating in an approved Short-Time

The Florida Administrative Code outlines the specific

Compensation Plan are subject to a rate of 1.0

information an employer is required to maintain in the

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

payroll records. The types of records needed for an

though an employer may no longer be participating

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

in the program, all benefits charged as a result of

individual earnings records, check registers, check

Short-Time Compensation will be used in the tax

stubs, canceled checks, cash disbursement journals,

rate computation.

payroll ledgers, payroll summaries, petty cash,

work orders/invoices, master vendor files, general

Economic conditions resulting in abnormally high

journals, general ledgers, income statements,

unemployment accompanied by high benefit

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

charges cause a severe drain on the Unemployment

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

Compensation Trust Fund. The effect is an increase

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

in the adjustment factors, which in turn increases

proprietor), Form 1065 (partnership), partnership

tax rates for all rated employers. Conversely,

agreements, Form 1120 and all attachments (C

when unemployment is low, the adjustment factors

Corporation), Form 1120S and all attachments

decrease and tax rates for rated employers are

(S Corporation), corporate charters, independent

reduced accordingly.

contractor agreements, and charts of accounts.

When an employer first becomes liable for the

An employing unit may be held liable as an employer

payment of reemployment taxes, the beginning tax

regardless of the number of workers employed.

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

Adequate payroll records will reveal whether the

reported for approximately ten quarters, depending

employer has or has not met liability criteria for the

on the quarter of the year the employer established

liability. The account will then be rated by dividing

payment of reemployment taxes.

the benefits charged to the account by the taxable

Tax Rate

payroll on which wages were reported by the end

of the quarter preceding the quarter in which the

Regular

tax rate is to be computed. Once an account has

The method of determining varying tax rates

completed the required quarters of reporting, it will

assigned to taxpaying employers is referred to

then be considered for an experience rate at the

as “experience rating.” Under the reemployment

beginning of each calendar year thereafter.

assistance program law, an employer’s experience

The payroll used in annual rate computations may

rate is based on the employer’s own employment

vary from seven to twelve calendar quarters. The tax

records in relation to the employment records of all

rate is computed using the sum of three factors:

other employers.

•

Benefit ratio.

The purpose of the experience rating provision is to

•

Variable adjustment factor.

keep the Unemployment Compensation Trust Fund

•

Final adjustment factor.

at a stabilized percentage of the taxable payrolls

reported by all employers. The experience rating

To obtain the variable adjustment factor, the benefit

provision also helps make sure employers pay their

ratio is multiplied by a common multiplier, which

fair share based on their own experience rating.

varies from year to year. The final adjustment factor,

Variable adjustment factors and constant adjustment

which also varies from year to year, is the same

factors are computed yearly. These factors are used

for all employers and ultimately determines the

to help compensate the trust fund for the benefits

minimum rate for the year.

paid to eligible claimants who worked for employers

Reemployment Tax Rate Notices (RT-20) are mailed

whose taxes were less than the amount of benefits

to employers immediately prior to the new tax rate

paid, and benefit payments which are not chargeable

effective date. A protest of the assigned tax rate

to any employer’s account. These charges are

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

distributed to all rated employer accounts.

Reemployment Tax Rate Notice is mailed.

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

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

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