Every year at the end of July every employer subject to NJ unemployment taxes receives a “Notice of Employer Contribution Rates”. The form is light blue and mailed from The State of New Jersey Department of Labor and Workforce Development Employment Security Agency.
The Purpose of This Important Form
The purpose of the form is to advise the employer what their unemployment and disability tax rates are for the next year. Here is what you need to know.
Your payroll service uses the tax rates to calculate your unemployment and disability payroll taxes. What you do with the notice depends on the instruction you receive from your payroll service. There are three options.
1) If your payroll service downloads the rates directly from NJ you do not need to do anything.
2) If your service does not download the rates they will ask you to send them the notice.
3) Some internet only payroll services will require you to log on and enter the rates yourself.
Pieper Payroll falls in the first category. We download your rates. It is not necessary to send us your rate notice. We download your tax rate directly from NJ and automatically update your account.
Unemployment and Disability Rates in NJ
Unemployment/Disability Rates in New Jersey are assigned on a fiscal year basis (i.e. July 1st to June 30). All new employers (except successors) are assigned new employer rates for the first three calendar years after which a calculated rate is assigned based on employment experience.
Rates Are Retroactive
Please note, even though NJ does not issue the rates until the last week of July, they are retroactive to July 1st. If your rate does change, your payroll service needs to recalculate your tax liability back to July 1st and then credit/debit your account for any differences at the same time your third quarter tax report is completed.
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