Nebraska Unemployment Taxes Decline for 5th Straight Year

Nebraska’s average unemployment insurance tax rate for employers will decline for the fifth straight year.  The average rate for 2016 will be 1.00 percent, a decrease of 0.17 percentage points from the 2015 tax rate and a decrease of 2.33 percentage points from 2011.  The Nebraska unemployment rate has been lower throughout 2015 than in the corresponding months of 2014, which has resulted in less unemployment benefits being paid.  Under the statutory formula, the reduction in unemployment benefit payments and the healthy balance in the Nebraska Unemployment Trust Fund will result in Nebraska employers paying almost $20 million less in taxes in 2016 than they paid in 2015.

The Tax Foundation ranked Nebraska’s unemployment insurance tax system as second best in the nation in their 2016 State Business Tax Climate Index.  The report names Nebraska as one of the states having “simpler experience formulas and charging methods,” and among states who “have not complicated their systems with benefit add-ons and surtaxes.”

Nebraska’s average unemployment insurance tax rate is based on the revenue target for the Trust Fund, the state’s total taxable wages and the amount of unemployment benefits paid in the previous fiscal year.  Unemployment insurance benefits are paid from the Trust Fund to workers separated from covered employment who meet eligibility requirements.

Tax rate notices for 2016 were mailed to employers December 2 and are available online at dol.nebraska.gov/uiconnect.

For more information on the Nebraska Department of Labor visit dol.nebraska.gov.