Employers are divided into twenty separate rate classes according to their benefit ratios to determine their tax rates. Tax rates also vary with the trust fund balance. There are 7 possible tax rate schedules, named AA, A, B, C, D, E and F, ranked in order of increasing stringency. Each schedule determines a rate for each of the rate classes. The actual schedule that applies in a particular year depends upon the fund balance ratio, which is calculated by dividing balance of the UI trust by the total wages paid by employers subject to the tax.
Tax rates are high when there is relatively little money in the fund and low when the fund is flush.
Without a change in law, however, UI taxes would have risen in 2000. The reason is the extraordinary wage growth for Washington. The extraordinary growth in wages was due in large part to the prepackaged software industry. Overall, the average annual wage in covered employment was up 7.8 percent in 1998 over 1997. The growth in the prepackaged software sector annual wages was 43 percent.