Michigan announces its 2019 contribution rates
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Monday, March 18, 2019

Michigan announces its 2019 contribution rates

By Payroll and Entitlements Editorial Staff

Contribution rates for employers with three or more years of experience will continue to range from 0.06% to 10.3% in 2019. The maximum rate of 10.3% includes a 6.3% maximum chargeable benefit component, a 3.0% maximum account building component, and a 1.0% maximum nonchargeable benefits component. Note that if the employer has submitted no quarterly tax reports, that employer's maximum tax rate will be 10.3%, and the employer also will be assessed a penalty of 3.0%, which is separate from the contribution rate. In addition, the new employer rate remains at 2.7%, plus part of its chargeable benefits component depending on the employer’s year of liability, except for new construction employers.

The nonchargeable benefits component (NBC) for 2019 may range from 0.06% to 1.0%, depending upon an employer's experience. For an employer with no benefit charges for nine years, the NBC is 0.06%. For an employer with no benefit charges for eight years, the NBC will be 0.07%. For an employer with no benefit charges for seven years, the NBC will be 0.08%. For an employer with no benefit charges for six years, the NBC will be 0.09%. For an employer with no benefit charges for five years, the NBC will be 0.1%. For all other employers, the NBC is 1.0%.

In 2019, an obligation assessment (OA) will be applied to all contributing employers until the state’s refinancing bonds are repaid. The OA calculation is structured to incorporate the employer’s experience rate and a base assessment. For 2019, the OA ratio is 0.166825 and the base assessment is $63 (MUIA Communication).

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