Labor and Economic Opportunity

The 2019 rates are as follows:

• OA ratio = 0.166825
• Base assessment = \$63.00
• Taxable wage base=\$9,000

The example calculation below is based on a fictional employer with a 2019 tax rate of 10.30% and 1,500 employees.

Instructions:

1. Divide your tax rate (10.3) by 100. The result should be 0.103.
2. Next, multiply 0.103 by the OA Ratio of 0.166825 (0.103 X 0.166825). Did you get 0.017182975? Good,that’s correct. Jot this number down.
3. Now divide the Base Assessment by the Taxable Wage Base (63/9000). You should get 0.007.
4. Next, add this number to the number you saved above and multiply the result by 100. (0.017182975 + 0.007 X 100). If you get 2.4182975, you’re right. Always round up this number to the next hundredths of a percent. So now you should have 2.42. This is your 2019 OA Rate (2.42%).
5. To obtain your cost per employee, multiply this example’s OA Rate of 2.42% by the taxable wage base of \$9,000. You should get a cost per employee of \$217.80.
6. To obtain the total cost for the example employer, enter the cost per employee of \$217.80 and multiply it by the number of employees, which is 1,500 in this example. You should get \$326,700 as the total cost for the example employer.

Example Results Summary:

• OA Rate = 2.42
• Cost Per Employee = \$217.80
• Total Cost for Employer = \$326,700

*Since most employers qualified for the \$9,000 taxable wage base, this was used in the calculation instead of the higher taxable wage base of \$9,500.