Question

Which of the following is not one of methods used to determine an employer's unemployment insurance experience rating?

A. Benefit ratio
B. Benefit-wage ratio
C. Payroll ratio
D. Reserve ratio

Answer 1

The 'Payroll ratio' is not one of the methods used to determine an employer's unemployment insurance experience rating. The correct methods include the benefit ratio, benefit-wage ratio, and the reserve ratio.

Step-by-step explanation:

The question pertains to methods used to calculate an employer's unemployment insurance experience rating, which is a way to determine an employer's unemployment tax rate based on their history of claims. The options presented are:

1. Benefit ratio
2. Benefit-wage ratio
3. Payroll ratio
4. Reserve ratio

The correct answer to the question is C. Payroll Ratio. This is not a commonly recognized method for determining an employer's unemployment insurance experience rating. The typically recognized methods are:

• A. Benefit Ratio - This compares the amount of unemployment benefits charged to an employer's account against the taxes that employer has paid into the system.
• B. Benefit-Wage Ratio - This takes into account the wages paid by the employer and the unemployment benefits charged against the employer’s account.
• D. Reserve Ratio - This involves calculating the balance in an employer's unemployment account and comparing it to the total taxable wages paid.

Each of these methods helps to assess the risk of unemployment claims associated with an employer, which in turn affects their unemployment insurance tax rates.