Tax Array System Explanation

Each employer’s Reserve Ratio is recomputed every year. This recalculation may or may not result in a rate change.
All employers are "arrayed" on a list in descending order by their Reserve Ratios. The employers are divided into 20 categories with approximately the same amount of taxable wages in each category.
The 20 categories each have an experience factor. That is the proportion of the average contribution rate that is payable by employers in that category.
The planned yield is determined from a set of formulas. It is the percentage of total (taxable) wages necessary to generate the desired amount of revenue.
The average contribution rate, or predetermined yield, is then computed. It is the average contribution rate needed to generate the desired amount of revenue for the amount of taxable wages.
The contribution rates for the 20 categories are computed by multiplying the predetermined yield by the experience factors for each category.
An array system redistributes the contribution burden significantly.

EMPLOYER RATE ARRAY FOR YEAR 2007

The New Employer Rate for 2007 is 1.80%