Rate Schedule

The appropriate schedule is determined by a special formula in the Vermont Unemployment Compensation Law. Section 1326 of the Vermont Unemployment Compensation Law provides five different rate schedules, each with twenty-one tax rates. The tax schedules are designed so that rate Schedule 3 provides an "equilibrium" of funding across the business cycle. Schedules 1 and 2 raise less money than the equilibrium and Schedules 3 and 4 raise more than the equilibrium. The difference in the total amount raised under each schedule is approximately $10 million.

The unemployment trust fund is "forward funded", which means that the tax schedules are designed to raise funding during good economic times to ensure that there is adequate funding during recessions. The U. S. Department of Labor suggests that a state trust fund be maintained at a sufficient level such that if no additional taxes were paid, the trust fund could continue to pay benefits for at least one year. Vermont's rate schedules are designed to maintain at least 1.5 years of funding if no additional taxes are paid. 

The tax schedules and rates are as follows:

Tax Rate Class	Tax Rate Schedules
	1	2	3	4	5
0	0.4	0.6	0.8	1.1	1.3
1	0.5	0.7	0.9	1.2	1.5
2	0.6	0.8	1.1	1.4	1.8
3	0.7	1.0	1.4	1.7	2.1
4	0.8	1.2	1.7	2.0	2.4
5	0.9	1.4	2.0	2.3	2.7
6	1.1	1.7	2.3	2.6	3.0
7	1.4	2.0	2.6	2.9	3.3
8	1.7	2.3	2.9	3.2	3.6
9	2.0	2.6	3.2	3.5	4.0
10	2.3	2.9	3.5	3.8	4.4
11	2.6	3.2	3.8	4.1	4.8
12	2.9	3.5	4.1	4.5	5.2
13	3.2	3.8	4.4	4.9	5.6
14	3.5	4.1	4.7	5.3	6.0
15	3.8	4.4	5.0	5.7	6.4
16	4.1	4.7	5.3	6.1	6.8
17	4.4	5.0	5.6	6.5	7.2
18	4.7	5.3	5.9	6.9	7.6
19	5.0	5.6	6.2	7.3	8.0
20	5.4	5.9	6.5	7.7	8.4