2025 Annual Tax Rate and Benefit Charge Information - Unemployment Insurance

Employers received a new 2025 Rate Notice in BEACON as of Monday, March 17. Each employer will receive notice of this correspondence through their preferred communication method (text, email, or mail).

1. How are tax rates calculated for 2025?

For prior calendar years (2021 through 2024), unemployment insurance (UI) Annual Tax Rate notices contained two calculations, one based on an employer’s pre-pandemic experience with layoffs and the other based on normal experience (see question #3). For those years, each employer was assigned the lower of the two rates.

• For 2025, however, employers will receive one tax rate, calculated based on normal experience (the provision of the Maryland RELIEF Act of 2021, which allowed the option to use pre-pandemic experience, expired).

NOTE: Under the 2024 Protecting Opportunities and Regional Trade (PORT) Act, UI benefit charges related to the collapse of the Francis Scott Key Bridge will not impact an employer’s 2025 tax rate (if it was determined that the charges were related to the reduced operations of the Port of Baltimore and the employer had no control over the disruption in employment).

2. What tax table is in use for 2025?
Employers will be taxed under the Table A tax rate schedule for the 2025 calendar year. Table A includes rates from 0.30% to 7.50%. (view Table A). For 2025:

• New employer rate - 2.60%.
• Foreign contractor - 2.60% (for new construction employers headquartered in another state).
• Standard rate - 7.50%.
• Interest rates are 1.5% per month (on unpaid balances).
  NOTE: Employees are charged interest on late contribution/reimbursement payments.
• Taxable wage base - $8,500.

3. How are employer tax rates determined?
For UI tax purposes, employers are considered contributory or reimbursable.

• Contributory employers pay quarterly UI taxes based on benefit charges and taxable wages.
   
• Reimbursable employers (government entities and certain non-profit organizations) may choose to reimburse the state for benefits charged against their account, instead of paying quarterly UI taxes. For more, see the Reimbursable Employers flyer.

Contributory employers are assigned one of three different types of tax rates.

• New Account Rate - This rate is assigned to a new employer (an employer who is not yet eligible for an experience rate. See below). The new account rate (also called new employer rate) is determined by averaging the rates among all employers in the state (during the last five years).
  
  Note: New employers in the construction industry that are headquartered in another state are assigned the average rate for the construction industry in Maryland (not the typical new account rate).
   
• Experience Rate - The experience tax rate (also called earned rate) is calculated based on an employer’s benefit charges and taxable wages. This rate is assigned after an employer has paid wages to employees in at least two fiscal years (July 1 to June 30) before the computation date (see question #4 for details).
  
  
• Standard Rate - The standard rate is the highest rate on the tax table. This rate is assigned to an employer who is eligible for an earned rate, but has no taxable wages in a year because the employer failed to file quarterly tax and wage reports.

Tax Rate Calculation

4. How are experience tax rates calculated?
An employer’s experience rate is determined by the employer’s benefit ratio and the tax table in effect for the year.

• In Maryland, UI tax tables range from Table A (lowest rates) to Table F (highest rates). On each tax table, an employer’s benefit ratio corresponds with a specific UI tax rate.

An employer’s benefit ratio is determined by dividing the employer’s benefit charges by their taxable wages (from the three fiscal years before the computation date).

The computation date is the July 1 date before the calendar year for which the rate is assigned. Example: The computation date for 2020 was July 1, 2019. Fiscal years 2017, 2018, and 2019 were used to determine an employer’s 2020 experience tax rate.

Note: If an employer has only been in business for two fiscal years before the computation date, the benefit charges and taxable wages for those two years are used.

Experience Rate Notice

5. When do employers receive their annual tax rates?
In January, each employer is sent an Experience Rate Notice, which informs an employer of their UI tax rate for the new calendar year. Notices are available in BEACON and sent through the employer’s preferred communication method. To access your rate notice in BEACON:

Employers may access their annual rate notice in BEACON by:

• Log in and select “Tax Rate Functions” from the portal’s left menu (when you log in, you will be in your personal BEACON portal).

6. Can an employer protest their annual tax rate?
Yes, an employer can protest their tax rate by requesting a review determination (within 30 days of the Date of Notice listed on the Experience Rate Notice). An employer can request a review in BEACON or by mail.

To do so in BEACON:

• Select “Tax Rate Functions” from the portal left menu.
• Select “Rate Notice.”
• Then, select “Protest” under Annual Tax Rate Calculation (at the bottom of the screen).

Send a request for review by mail to:

Division of Unemployment Insurance
Review Determination Unit
100 S. Charles Street, Tower 1, Suite 3100
Baltimore, MD 21201

For questions about your UI tax rate, call 410-949-0033.

Payments

7. How can an employer file quarterly contribution reports and make payments?

Contributory employers are required to pay UI taxes and file contribution reports each calendar quarter.

Employers can file their contributions reports and submit payments in BEACON (by ACH Credit or ACH Debit). Employers can also pay by check. Make the check payable to the Maryland Division of Unemployment Insurance Fund and mail it to:

Division of Unemployment Insurance
PO Box 17291
Baltimore, MD 21297-0365

For more, see the BEACON Employer FAQs.

NOTE: An employer may request to enroll in a payment plan (to pay UI contributions in three-month installments or monthly installments). For more, see the Employer Payment Plans webpage.

8. What should employers do if they believe a fraudulent charge is included on their benefit charge statement?
Employers should protest the benefit charge statement in BEACON
by:

• Selecting Benefit Charge Functions from the left menu.
• Choosing the Year/Quarter hyperlink
• Selecting the claimant’s Social Security Number.
• Selecting Request Relief of Charges.
• Choosing the reason for the protest.
• Entering the reason for the protest. (There will be an option to upload supporting documentation).
• For information about reporting UI fraud, see the UI Fraud Awareness and Reporting Instructions webpage. Employers will not be charged for benefits that are determined to be fraudulent.

NOTE: Employers may protest a fraudulent claim after the 30-day protest period by mail to:

Division of Unemployment Insurance
Review Determination Unit
100 S. Charles Street, Tower 1, Suite 3100
Baltimore, MD 21201