Payroll Taxes

Oregon’s Self-Adjusting Tax Rate Schedules

 

Oregon employers pay into the Unemployment Insurance Trust Fund though payroll taxes. This fund provides unemployment insurance benefits to workers who are out of work through no fault of their own. In addition to providing support to these workers, the fund helps communities by ensuring that money continues to flow through the local economy during periods of economic downturn.

 

What are the tax rate schedules?

 

Prior to the mid-1970s if Oregon’s Unemployment Insurance Trust Fund was getting low, state lawmakers would have to pass legislation to make adjustments to payroll taxes paid by employers. This served Oregon well until the recession in the early 1970s resulted in rapidly increasing benefit payments and reduced the Trust Fund near insolvency.

 

In 1975, the legislature, working with business and labor, passed major reforms that put in place a flexible tax base schedule. This model serves as the bases for the system in use today.

 

At the core of this formula is to ensure the UI Trust Fund is at such a level as to adequately cover Oregon workers should the state face another economic downturn similar to the Great Recession of 2007-2009.

 

The tax structure for Oregon’s unemployment trust fund consists of eight schedules. Movement between the schedules of tax rates is one of the self-balancing aspects of Oregon’s unemployment insurance trust fund law.

 

During times of high unemployment, as the Trust Fund is drawn down, the tax rate moves up the schedule to replenish the fund. During strong economic times, the rate moves down the schedule. Oregon law requires the Employment Department to use a statutory formula to determine employer payroll tax rates for the upcoming year.

 

Each schedule has a range of tax rates based on an employer’s previous unemployment insurance experience. Employers with more unemployment insurance claims have a higher tax rate than those with fewer claims.


The current taxes rates can be found here.​

 

Benefits of the Tax Rate Schedule

 

The trust fund provides important support for temporarily unemployed workers, their families, and communities while minimizing the impact on employers.

 

Due to Oregon’s forward financing and adjusting tax schedules, our state was able to weather the Great Recession without the balance dropping below zero as was the case with many states during this time. Thirty-six states borrowed money from the Federal Government in order to pay eligible unemployed claimants. They also faced interest charges and Federal credit reductions which resulted in employers facing higher taxes and surcharges. Although Oregon paid out the most unemployment claims in state history during that time period, the state’s Unemployment Insurance Trust Fund remained one of the strongest in the nation, providing needed benefits to workers and saving Oregon employers on their bottom line.​

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Unemployment Insurance Tax

Oregon Employment Department
875 Union St. NE 
Salem, OR 97311

Hours of Operation

8:00 AM  - 5:00 PM

Contact

Phone: 503-947-1488
Fax: 503-947-1487
Email: OED_Taxinfo_User@oregon.gov

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