What is the Unemployment Insurance program?
The Unemployment Insurance (UI) program provides weekly benefits to eligible unemployed workers. These benefits provide economic stability to workers and their families during temporary periods of unemployment and help lessen the effect of unemployment on the local economy. The program is financed solely through employer contributions (taxes). It is not operated as a part of the federal Social Security system, the state Worker's Compensation program or any federal or state welfare program.
What is the difference between Wisconsin's Unemployment Insurance law and the Federal Unemployment Tax Act (FUTA)?
The Wisconsin Unemployment Insurance program is financed by employers quarterly State and annual Federal Unemployment Tax payments. The Federal Unemployment Tax is used, in part, to finance the administrative expenses of each state's unemployment insurance program. Unemployment taxes paid under Wisconsin Unemployment Insurance law are used only to pay unemployment benefits to unemployed workers.
An individual account is maintained for each individual employer covered under Wisconsin UI law. The balance in this account is maintained for the purpose of determining your annual tax rate. The balance increases with a portion of each tax payment made by you and decreases with every unemployment benefit payment made to your laid off workers. You will receive a weekly statement when there is benefit charge activity in your account. This statement shows all the increases and decreases to your account balance including detailed information regarding the benefit charges. The taxes paid are similar to insurance premiums, and in the event an employer goes out of business, no money in the Reserve Fund is ever returned to the employer.
After the initial new employer tax rating period, we determine your experience rate as follows:
Formula Calculations: RFB ÷ FYTP = RP
The rate schedules can change from year to year depending on the overall condition of Wisconsin's Unemployment Reserve Fund. The cash balance in the Reserve Fund on June 30 each year determines which of the four statutory rate schedules is in effect for the following calendar year.
The rate schedule differs if you are considered a small or a large employer. If taxable payroll is $500,000.00 or more, the employer would be considered a large employer.
For more information, please visit our Handbook for Employers at https://dwd.wisconsin.gov/ui201
If you have questions, please contact our Employer Service Team at (608) 261-6700 or firstname.lastname@example.org.
Publication Number UCT-17539-P (R. 10/2018)