From staff reports

Now that more Mainers have returned to work after the recession, the unemployment insurance tax rate for Maine businesses will be reduced by more than one-fifth in 2016.

The Maine Department of Labor said Thursday the tax rate will drop to its lowest since 2009, which represents a roughly 21 percent decrease in unemployment taxes paid per employee.

The state’s preliminary, seasonally adjusted unemployment rate fell to 4.4 percent in September, down from 5.6 percent a year earlier.

September’s unemployment rate was the lowest it has been since April 2006.

Maine’s unemployment rate shot upward after the 2008 financial crisis but stabilized in 2011 and has since fallen gradually. The reversal has had the dual effect of reducing the number of people receiving unemployment while improving the overall health of the Maine Unemployment Trust Fund, the department said.

State unemployment taxes are paid by employers into the trust fund and are used to pay benefits to people who lose their jobs through no fault of their own. No funds are taken out of Maine workers’ paychecks to support the system.

Employers pay unemployment taxes on up to the first $12,000 of annual wages paid to each employee.

Each business’ rate is based upon its unemployment insurance experience, taxable wages and past contributions compared with those of other businesses.


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