UI contribution rates for newly subject employers
Newly subject employers pay at an assigned rate for the first 3 calendar years. In the fourth year of subjectivity, employers receive a true experience rating using the formula prescribed by law, according to Massachusetts General Laws Chapter 151A, Section 14.
Non-construction industry employers
- Newly subject employers in the non-construction industry pay at a rate consistent with a positive account reserve percentage of between 10.5% but less than 11% from the rate schedule currently in effect
- The current newly subject employer rate for employers in the non-construction industry is 1.45%, according to UI Tax Rate Schedule A in effect for 2023
- This rate is subject to change any time the rate schedule changes
Construction industry employers
- Newly subject employers in the construction industry (North American Industrial Classification System code 23) pay at a rate consistent with the average rate of employers in this industry
- The current newly subject employer rate in the construction industry is 5.55% for 2023
- This rate is subject to change annually
UI contribution rates for established employers
After the first 3 years at a new employer rate, the Department of Unemployment Assistance (DUA) calculates an experience rating based on the reserve ratio method:
- A reserve percentage is calculated by dividing the employer's account balance by the 3-year wage average (subject to UI tax).
- The reserve percentage is applied to the annual rate schedule currently in effect, and the experience rate is determined for the coming year.
UI contributions owed are based on wages paid. Once an experience rate is assigned, that rate is applied to the wage base in effect during that year. The taxable wage base is $15,000 in wages per employee per calendar year.