Oklahoma employers are required to pay a contribution rate to the Oklahoma Unemployment Insurance (UI) Trust Fund. This fund issues temporary income (benefits) to eligible claimants who become totally or partially unemployed. Every September, a "Notice of Employer Contribution Rate" is sent to every experience-rated Oklahoma employer, which contains their updated benefit wage ratio and contribution rate for the upcoming year.
As a result of the pandemic, starting in March 2020, historic levels of benefits were paid from the UI Trust Fund to unemployed individuals. The resulting depletion of the UI Trust Fund led to an experience factor of 50% and conditional factor D in 2021 and 2022. The experience factor and conditional factor remain unchanged for 2023. The majority of employer rates will not have an increase for 2023. Contribution rates for 2023 range from .3% to 9.2%.
OESC calculates employer contribution rates using the information provided in an employer's quarterly wage reports, as well as the state's current experience factor (50%) and conditional factor (D). The rate calculation involves dividing the benefit wage charges (BWC) into the timely taxable wages to create a benefit wage ratio. That ratio is then used to calculate the employer's contribution rate using the rate table below.
After finding the benefit wage ratio in the table row for state experience factor of 50%, the corresponding tax rate can be found directly underneath. The conditional factor (D) calculation for 2023 must then be applied, which for rates of 0.1% to 0.9%, simply add 0.6%. For rates of 1.0% or greater, multiply the rate by 1.667.
The rate for newly established employers is 1.5%.
For more information about contribution rates, and the various factors that go into it, refer to article 3 of the Oklahoma Employment Security Act.
A benefit wage charge amount of $10,000 divided by the amount of timely taxable wages of $300,000 ends up with a benefit wage ratio of 3.3%. The $10,000 is 3.3% of the $300,000. The benefit wage ratio is then referenced on the rate table, using the state's current experience factor (50%), which shows a contribution rate of 1.7%. Since this rate is greater than 1.0%, multiply it by 1.667, which gives a final contribution rate of 2.8%.”
*Exception - rates of 3.4% or greater will not increase by more than 2% in two years.
Employers can protest contribution rates; although, errors in the computation of rates are rare since it is calculated by a computer. Keep in mind, this is separate process from protesting benefit wage charges or employee separations. To protest a “Notice of Employer Contribution Rate”, submit an OES-048P Employer Contribution Rate Protest Form within 20 days of the date on the notice. If a protest is submitted after 20 days, it will not be considered unless "good cause" can be provided (see Oklahoma Administrative Code 240:10-11-24). For efficient and quicker processing, protest forms should be emailed to email@example.com.
Benefit Wage Charges
When an individual is allowed unemployment benefits and receives their 5th week of unemployment, an OES-502 "Notice of Benefit Wages" is mailed to each base period employer showing the amount of base period wages being charged. Benefit wage charges (BWC) are the taxable base period wages reported by an employer to OESC through the quarterly wage reports, which are not to exceed the annual limit. Benefit wage charges are used to create an employer's benefit wage ratio. This ratio is used to calculate an employer's annual contribution rate.
Any "Notice of Benefit Wages" received should be retained for record keeping, as no additional transcript will be furnished.
Protesting Your Benefit Wage Charges
Employers can protest benefit wage charges. Keep in mind, this is a separate process from protesting annual contribution rates and employee separations. To protest a "Notice of Benefit Wages", employers must submit an OES-502P Benefit Wage Charge Protest Form within 20 days of the date on the notice. If a protest is submitted after 20 days, it will not be considered unless "good cause" can be provided (see Oklahoma Administrative Code 240:10-11-24). For efficient and quicker processing, protest forms should be emailed to firstname.lastname@example.org.
For a detailed list of acceptable reasons for protest, visit the Benefit Wage Charges section of our Frequently Asked Questions page for employers.
Appealing A Decision
When an employer disagrees with a contribution rate or benefit wage charge, the first step is to submit a protest. Typically, protests will be sufficient to resolve matters; however, there may be cases where an employer disagrees with a decision on a protest and wishes to file an appeal. The Assessment Board at OESC will hear cases concerning employer unemployment tax accounts, such as: employer contribution rates, whether a worker is an independent contractor or an employee, assessments of contributions or reimbursement payments, waivers of penalty or interest, and more.
Have questions or want more information?
For more information about contribution rates and benefit wage charges, view article 3 of the Oklahoma Employment Security Act (OS Title 40), or check out our Frequently Asked Questions page for employers.