The below applies to all Oregon employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes – high or low. Many nonprofits could save as much as 30 percent or more on their unemployment costs by opting out of the unemployment insurance tax system – an advantage provided to them by the IRS. Doing so affords nonprofits unique avenues that allow them to strategically handle unemployment claims administration and unemployment insurance taxes in ways that for-profits can only dream about.
Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.
Unemployment tax rates for employers subject to Oregon payroll tax will move to tax schedule two for the 2020 calendar year. In part, this means that the state’s unemployment-taxable wage base will increase to $42,100, up from $40,600 for 2019. Oregon has one of the highest taxable wage bases in the country; meaning Oregon employers pay some of the highest state unemployment taxes in the nation.
Tax schedule two includes an average rate of 1.73 percent for the first $42,100 paid to each employee. The specific rate each employer will pay under the new schedule depends on how much they have used the unemployment insurance system.
Oregon adjusts employer tax rates annually using eight tax schedules based on the solvency of the Unemployment Insurance Trust Fund. Movement between the eight schedules of tax rates represents part of the self-balancing aspects of Oregon’s Unemployment Insurance Trust Fund law. Each September, a formula contained in statute, determines how much should be collected during the next year to maintain a solvent fund. Each schedule has a range of tax rates based on an employer’s previous unemployment insurance experience. Employers with more unemployment insurance claims have a higher tax rate than those with fewer claims.
Oregon’s unemployment rate has fluctuated slightly, generally remaining at or near a record low for three years. The low number of unemployed workers reflects a very tight job market. This creates some challenges for employers growing their workforce, and means far fewer Oregonians who unable to find a job. The jobs employers provide contribute to a vibrant Oregon economy and support the quality of life for Oregonians.
The Oregon Employment Department mailed notifications to businesses regarding their individual tax rates and encourages employers to wait until they receive their individual notice before attempting to contact the department with questions. Any employer who has not received their notice within the next couple of weeks should contact the Oregon Employment Department Unemployment Insurance Tax Section. Contact information may be found online at www.oregon.gov/employ.