Overview of Minnesota Unemployment Tax Rates for 2022

    Overview of Minnesota Unemployment Tax Rates for 2022

    by Heather Larson, CPP

    January 3, 2021 β€” The 2022 Minnesota unemployment insurance tax rate determinations have now been sent out by the U.S mail or can be found online in your correspondence tab when logged in on the MNUI System. In 2022, the first $38,000 of wages you pay to each employee is taxable for MN unemployment insurance. The base tax rate is 0.50% and can go up to a maximum of 8.90% based off your experience rate.

    In addition to your base rate there are three assessments that will be included in your balance due:

    1. A workforce development assessment of 0.10% will be owed on your quarterly taxable wages.
    2. An additional assessment of 14.00% will be owed on the amount of UI tax due. Employers with covered employment are required to pay additional funds to replenish the state UI trust fund when it falls below a certain level on March 31 of the preceding year.
    3. A federal loan interest assessment of 1.80% on the amount of UI tax due. When the trust fund is depleted because of high payouts - usually during a recession - the state borrows money from the Federal unemployment trust fund. States must pay interest on the borrowed funds. The Federal loan interest assessment is used to pay the interest on the loan.

    We recommend employers review their tax rate determination notices to plan for the additional taxes due quarterly during 2022. Employers have the option to buy down their 2022 unemployment insurance tax rate with the agency. See our article here for more information.

    Employers can log in to view their tax rates and use the optional calculator tools available in their employer portal. Please visit https://www.uimn.org/ to login.

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    Heather Larson, CPP

    Heather Larson, CPP

    Heather Larson is a manager in the Accounting and Management Outsourcing (AMO) group, and is the Payroll Services team leader at Redpath and Company. She assists clients with payroll processing and tax filing, including annual Forms W-2 and 1099, and technical payroll and benefit research. Heather works with a variety of industries and business structures, assisting with individualized payroll needs to meet federal and state payroll tax compliance. She has been with Redpath and Company since 2015.