There are three separate components that determine a fully experienced employer's tax rate. (A fully experienced employer is an employer who is in his/her fifth year or more of business.)
The Chargeable Benefit Component(CBC) is made up of the total unemployment charges against the employer for the most recent 5 years.
The Account Building Component(ABC) is a reserve account for possible payment of future benefits. The amount required in this component is based on the payroll for the most recent year.
The Non-Chargeable Benefits Component(NBC) is used to pay benefits that cannot be charged to a specific employer's account.
All of these components are taken into consideration when determining an employer's tax rate. The maximum computed tax rate for 2003 for a fully experienced employer is 10.3%. The lowest computed tax rate is .06%. This does not include any penalties for missing reports which could add up to another 3%.