Determine Your Obligation Assessment
For the convenience of our employer customers, below are instructions to help you figure your 2016 obligation assessment.
The 2016 rates are as follows:
- OA ratio = 0.188239
- Base assessment = $63.00
- Taxable wage base=$9,000
The example calculation below is based on a fictional employer with a 2016 tax rate of 10.30% and 1,500 employees.
- Divide your tax rate (10.3) by 100. The result should be 0.103.
- Next, multiply 0.103 by the OA Ratio of 0.188239 (0.103 X 0.188239). Did you get 0.019389? Good, that’s correct. Jot this number down.
- Now divide the Base Assessment by the Taxable Wage Base (63/9000). You should get 0.007. Next, add this number to the number you saved above and multiply the result by 100. (0.019389 + 0.007 X 100). If you get 2.6389, you’re right. Always round up this number to the next hundredths of a percent. So now you should have 2.64. This is your 2016 OA Rate (2.64%).
- To obtain your cost per employee, multiply this example’s OA Rate of 2.64 by the taxable wage base of $9,000. You should get a cost per employee of $237.60.
- To obtain the total cost for the example employer, enter the cost per employee of $237.60 and multiply it by the number of employees, which is 1,500 in this example. You should get $356,400 as the total cost for the example employer.
Example Results Summary:
- OA Rate = 2.64
- Cost Per Employee = $237.60
- Total Cost For Employer = $356,400
*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.