Benefit Wage Ratio

Under a benefit wage ratio plan, wages paid to a worker during the base period are used to determine the employer's tax rate. When a worker gets unemployment benefits, base-period wages (or benefit wages) are charged to all of the worker's base-period employers. The state computes the employer's rate by dividing the benefit wages charged against the employer during the relevant period by the employer's total taxable payroll for that period. The resulting benefit wage ratio is then used to determine the employer's actual tax rate.