Missouri employers will pay lower taxes on a smaller portion of their workers’ wages next year because of a healthy balance in the state’s unemployment insurance fund, the Missouri Division of Employment Security announced.
The state fund that pays unemployment benefits for workers who lose their jobs due to layoffs or other reasons unrelated to work performance had a balance of $1.1 billion on Oct. 31. As a result, employers will only pay the tax on the first $11,500 of wages paid to each employee instead of the $12,000 base that was used for 2019.
In addition, the tax rate each employer pays will be cut by 12 percent, the division stated in a news release issued Friday. Employers pay a rate based on their past experience of workers claiming payments.
The division is authorized to raise or lower the wage base and tax rate each year based on the balance in the fund and anticipated payouts.
The large balance in the state fund is due to low unemployment in recent years and a 2018 law that cut the maximum benefit period from 20 to 13 weeks.