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V.I. Department of Labor Reminds Employers of New Payroll Tax Rate in Effect for Quarterly Reports

Labor Commissioner Gary Molloy (Photo courtesy of the Legislature of the VI)

Labor Commissioner Gary Molloy is reminding all employers that the new Payroll Variation Tax methodology and Experience Rating System was executed on Jan. 1, 2024. This update follows extensive briefings held through virtual and in-person town halls from February through November 2023, and a prior press release announcing the new Unemployment Tax rate in December of 2023.

The new tax methodology is detailed in Act 8209, with the implementation date revised by Act 8827. Employers should note that this change is separate from any implementation delays of the online Employer Portal. The new tax rate is in effect.

Under the new system, employers have been assigned a new tax rate. This rate includes:

  1. Total Contribution Rate: A base contribution rate and fund solvency factor that is calculated each year based on a ratio of all employer’s total wages to taxable wages.
  2. Tax Rate Factor: This includes the portion of the employer tax rate that inputs the experience factor for the given period.

Some employers have submitted their first quarterly reports for 2024 using the old tax rates. These employers are non-compliant with current labor laws and may face interest on any unpaid taxes.

For more information, contact VIDOL Tax Unit at 773-1994 (St. Croix) or 776-3700 (St. Thomas). Stay updated by visiting www.vidol.gov and following the VI Department of Education on Facebook.

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