Oregon’s Self-Adjusting Tax Rate
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?
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.
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.
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.
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.
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
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
trust fund provides important support for temporarily unemployed workers, their
families, and communities while minimizing the impact on employers.
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