Details on the MD Unemployment Tax Increase- OUCH

October 13, 2009 | Subscribe to our RSS Feed

The Department of Labor, Licensing and Regulation just released word that the state’s unemployment insurance tax is set to more than triple for Maryland businesses effective January 1, 2010. Here are some details:

Each year, Maryland businesses are assigned an unemployment rate by the DLLR based on a review of the balance in the unemployment insurance fund as a whole along with other known economic factors. A standard baseline rate is established first. That rate is then increased if the business has had unemployment benefit claims filed against them in the last few years. The rate is then applied to the first $8,500 earned by each employee to determine the employers Maryland unemployment insurance tax liability. In 2009, the lowest rate (0.6%) resulted in tax of $51 per employee. With the new rates, the lowest rate for 2010 (2.2%) will result in a tax of $187 per employee, a $136 increase cost per employee. The tax could be much more painful for Maryland employers that have let workers go in the past three years as the rates will only go up from there.

As an employer, make sure you are prepared and that your budget reflects these changes for 2010.