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EXPLANATION OF THE NOTICE OF CONTRIBUTION RATES AND STATEMENT OF UI RESERVE ACCOUNT
(DE 2088) FOR THE PERIOD SHOWN ON YOUR DE 2088

TheNotice of Contribution Rates and Statement of To determine your rate, find your reserve ratio (shown on
UI Reserve Account(DE 2088) informs you of your line 17 of the DE 2088) on the assigned UI rate schedule
Unemployment Insurance (UI), Employment Training Tax (i.e., on Schedule “F,” ratio .129 would be 2.7 percent).
(ETT), and State Disability Insurance (SDI) contribution When the ratio between the UI Fund balance and the total
rates for the period shown on your DE 2088. It also shows wages paid by all employers is less than 0.6 percent, rates
the items used to determine your UI rate and the balance in Schedule F are multiplied by 1.15 (i.e., 2.7 percent
in your UI reserve account shown on line 15 of your multiplied by 1.15 equals 3.1 percent).
DE 2088. For more information on experience rating and/or
any further questions, refer to Information Sheet: California ETT Rate - Employers whose UI reserve account balance
System of Experience Rating (DE 231Z) (PDF) (edd.ca.gov/ is positive (zero or greater) pay an ETT of 0.1 percent.
pdf_pub_ctr/de231z), visit your local Employment Tax Employers whose UI reserve account balance is negative
Office (edd.ca.gov/Office_Locator) listed in the California (shows a minus sign before the amount) do not pay ETT
Employer’s Guide (DE 44) (PDF) (edd.ca.gov/pdf_pub_ctr/ and it is shown as 0.0 percent on the notice.
de44), or at call the Taxpayer Assistance Center at 1-888
745-3886 or TTY at 1-800-547-9565.
Exception: Employers subject to section 977(c) of the CUIC.
ISSUED DATE
SDI Contribution Rate - This is the percentage amount
This is the official mail date for the Notice of Contribution to be withheld from each employee’s salary. SDI is a
Rates and Statement of UI Reserve Account for the period wage continuation plan for employees who are unable
shown on your DE 2088. Due to bulk mailing, some to work because of nonoccupational illness, injury, or
notices are mailed prior to this date. due to pregnancy. It is funded through employee payroll
deductions.
YOUR EMPLOYER PAYROLL TAX ACCOUNT NUMBER
The SDI withholding rate is the same for all employers and
This is the eight-digit number assigned to you when you is calculated pursuant to section 984 of the CUIC. The rate
registered as an employer with the EDD. This number is based on the balance in the SDI Fund and the amount of
is assigned to you for UI, ETT, SDI, Personal Income disbursements and wages paid.
Tax (PIT), and Federal Unemployment Tax Act (FUTA)
purposes. Please refer to your employer payroll tax ANNUAL TAXABLE WAGE LIMITS
account number (shown as Account ID on the DE 2088)
when making inquiries about your account. UI and ETT are paid and SDI is withheld on the first
wages earned by each employee per calendar year up to
CONTRIBUTION RATES the annual taxable wage limit shown on your DE 2088.

UI Contribution Rate - This is your UI contribution rate RIGHT TO PROTEST
for the period shown on your DE 2088. New employers Any item on the DE 2088 may be protested except SDI
are assigned a 3.4 percent UI rate for a period of two and ETT, which are specifically set by law. To protest
to three years. This will depend on when the employer online, visit the EDD e-Services for Business (edd.ca.gov/
meets the criteria under section 982(b) of the California e-Services_for_Business). You must provide a valid Letter
Unemployment Insurance Code (CUIC) (leginfo.legislature. ID with the associated tax rate year you are protesting, and
ca.gov/faces/codes). After that, an employer’s contribution it must be submitted within 60 days of the issued date on
rate is determined by his/her experience rating and the the notice. A protest may also be filed in writing and must
condition of the UI Fund.
be postmarked within 60 days of the issued date on the
notice. Please include your employer payroll tax account
UI Rate Schedule - Section 977 of the CUIC mandates
which Contribution Rate Schedule is in effect. Each year, number, the specific item(s) you wish to protest, and the
the schedule is determined by the ratio between the reason you are protesting. To request an extension of up to
UI Fund balance on September 30 and the total wages paid 60 days, it must be in writing and show good cause. Mail
by all employers. When this calculation produces a ratio your written protest and/or request for an extension to:
of less than 0.6 percent, the rate the employer would have
paid in Schedule F is multiplied by 1.15, rounded to the Employment Development Department
nearest tenth, as mandated by section 977.5 of the CUIC. Rate Management Group, MIC 4
All tax-rated employers are rated under the same schedule. PO Box 826880
A copy of the Contribution Rate Schedule is on the last page Sacramento, CA 94280-0001
of this explanation sheet.
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EXPLANATION OF THE UI RESERVE ACCOUNT BY LINE 10. Increase in Negative Reserve Balances - Shows
ITEM: the amount of prorated charges to your UI reserve
account as a result of the increase in the total of all
1. Previous Reserve Balance - Shows the ending balance negative UI reserve account balances.
in your UI reserve account as of the date shown on
your DE 2088. 11. Benefit Overpayments Established - Shows the
amount of prorated charges to your UI reserve
account as a result of UI benefit overpayments
2. UI Contributions Paid - Shows the total of all UI established.
contributions paid by you for the period shown on
your DE 2088. 12. UI Benefits not Charged to Reserve Accounts - Shows
the amount that has been charged to your UI reserve
NOTE: The ETT paid is not considered UI contributions account as a result of CUIC provisions relieving
and is not included in this figure. When allowed, individual UI reserve accounts of charges under
voluntary UI payments are included but cannot be certain conditions. Each year, the total of all benefit
taken as a credit on any tax return. charges not charged to individual UI reserve accounts
is accumulated and prorated to all employers.
3. Interest Earned by UI Fund - Shows the amount 13. Other Expenses - Shows the amount of prorated
credited to positive UI reserve accounts for interest charges to your UI reserve account for miscellaneous
earned on the UI Fund. Employers with a negative UI expenses of the UI Fund.
reserve account balance as shown on line 15 of your
DE 2088, do not receive a portion of these interest 14. Total Charges - Shows the total of all the items
earnings. subtracted from your UI reserve account from line
items 9 through 13 above.
4. Negative Balance Reduction - Shows the amount of
your negative UI reserve balance canceled per 15. Your new UI reserve balance shown on your
DE 2088:
section 1027.5 of the CUIC.
Previous Reserve Balance (line 1)
5. Benefit Overpayments Collected - Shows the amount Plus Total Credits (line 8)
credited to your UI reserve account for overpayments Minus Total Charges (line 14)
recovered from claimants who were overpaid UI New Reserve Balance (line 15)
benefits as a result of error or fraud.
16. UI Taxable Payroll - Shows the total of all UI taxable
6. Positive Reserve Account Balances Canceled - wages reported on your Quarterly Contribution
Shows the amount credited to your UI reserve account Return (DE 3D), Employer of Household Worker(s)
as the result of the cancelation of positive UI reserve Annual Payroll Tax Return (DE 3HW), or Quarterly
accounts. Whenever an employer ceases to pay Contribution Return and Report of Wages (DE 9)
wages, the UI reserve account (unless transferred to a for the years shown on your DE 2088 and any
successor’s account) is canceled after a period of three adjustments made to the taxable wages for those
consecutive years. Each year, the total of the canceled years. An increase in UI taxable payroll may result in
UI reserve accounts with positive balances is prorated an increase to your UI contribution rate.
to all employers’ accounts.
17. Reserve Ratio - Shows the ratio between your UI
reserve balance and your average base payroll.
7. Other Income - Shows your share of money deposited
in the UI Fund from other sources. Reserve Account Balance = Reserve Ratio
Average Base Payroll
8. Total Credits - Shows the total of all the items
added to your UI reserve account from line items 2 To determine youraverage base payroll, divide the
through 7 above. UI taxable payroll on line 16 by the number of years
of UI taxable payroll history within the three years
9. UI Benefits Charged - Shows the amount of UI benefits shown on your DE 2088.
paid to your former employees for the period shown UI Taxable Payroll = Average
on your DE 2088. This amount should agree with 3, 2, or 1 (depending on Base Payroll
the amount shown on your Statement of Charges to taxable payroll history)
Reserve Account (DE 428T). These charges may also be
as a result of a UI reserve account transfer. For partial NOTE: If taxable wages are reported in at least
transfers, the successor will not receive the DE 428T. one quarter of a year, that is considered a full year with
wages.
The UI taxable wages for the time period shown at
the bottom of the DE 2088 are used to calculate the
prorated credits and charges.

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MINIMIZING YOUR UI RATE COMMON QUESTION

• Work with your employees to avoid separations. Q. Why did my rate increase?
Every discharge has the potential to increase your
contribution rate. A. Your rate will increase for any one or all of the
• When a layoff is unavoidable, contact your local EDD following reasons:
office for assistance in finding work for your displaced 1. A change in the UI rate schedule used for all UI
workers. tax-rated employers. (Refer to page 1, “UI Rate
• Respond in time to all claim notices. Failure to respond Schedule,” for more information.)
may cause you to lose future protest rights.
2. A change in your taxable payroll for the three
• If possible, offer former employees a job when you are years shown on line 16 of your DE 2088. If there
notified they are drawing UI benefits. is either an increase or decrease, this will alter
• Submit your UI payment within the required time the ratio. (Refer to page 2, item 16, for more
limits, along with an accurately completed Payroll Tax information.)
Deposit (DE 88). Make sure that each of the funds the 3. The total charges were more than the total credits.
deposit represents is individually listed and that the (Refer to page 2, “Explanation of the UI Reserve
funds are totaled correctly. Entering the total figure Account by Line Item,” for more information.)
only on the DE 88 may cause your fund amounts
to be incorrectly allocated and your UI rate could Q. Why is my reserve account charged when none of my
increase. former employees drew benefits?
• Submit your Quarterly Contribution Return and Report A. To ensure the UI Fund remains solvent, all costs must
of Wages (Continuation)(DE 9C), or Employer of be reimbursed. This is done by sharing costs and
Household Worker(s) Quarterly Report of Wages and income to the UI Fund that are not directly credited
Withholdings (DE 3BHW), at the close of each quarter. or charged to an employer’s reserve account. (Refer to
page 2, items 5-7 and 10-13, for more information.)
RESERVE ACCOUNT TRANSFERS
Q. How do I manage my UI costs?
You may request a transfer of the predecessor’s (former A. For detailed information, refer to the Managing
owner’s) reserve account after acquiring another business. Unemployment Insurance Costs (DE 4527) (PDF)
You must submit an Application for Transfer of Reserve (edd.ca.gov/pdf_pub_ctr/de4527).
Account (DE 4453) (PDF) (edd.ca.gov/pdf_pubctr/de4453). Q. Is my reserve account balance refundable?
If your application is approved, your UI rate will be A. No. The UI contributions are deposited in the UI Fund
recalculated and may result in a reduction or increase in and used only to pay UI benefits. The reserve account
your UI rate. is a statistical method of measuring employment
experience and it is only used to determine your UI
• If you acquire part of another business and wish to contribution rate. Your reserve balance may not be
transfer a portion of it’s reserve account, you must used as a credit on your Quarterly Contribution Return
file an application within 90 days after the date of and Report of Wages (DE 9).
acquisition. Q. Why does my rate increase when I hire more
employees?
• If you acquire all of another business, you have up
to three years to file an application after the date of A. The more employees you have, the greater your risk
acquisition. However, an application filed after of UI claims. Any increase in your taxable payroll
90 days may be restricted. without a corresponding increase in the reserve
account balance can result in a higher UI tax rate.
If your average taxable payroll increases but your
Not all reserve account balances are desirable. If the transfer
reserve balance does not increase proportionately,
of your predecessor’s reserve account is approved, you will
your reserve ratio will decrease, causing your UI rate
be subject to all or a percentage of the predecessor’s benefit to increase. (See page 2, items 16 and 17, for more
charges, which could increase your rate in future years. information.)
VOLUNTARY UI CONTRIBUTIONS Q. Can my reserve account be canceled?
Voluntary Unemployment Insurance (VUI) payments are A. Yes. Whenever you cease to pay wages, the reserve
allowed in years when rate schedules AA to D are in account, unless it has been transferred under
effect. VUI is not available when rate schedules E or F are sections 1051-1061 of the CUIC, shall be canceled
in effect, or in calendar years in which the emergency on the records of the EDD after a period of three
solvency surcharge is in effect. consecutive years has elapsed following the latest
calendar quarter in which you paid wages.

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                                    UI CONTRIBUTION RATE SCHEDULE

     Reserve Ratio 
                                                                 Contribution Rate Schedules 
Line Exceeds or =        Less than                                      Stated as a Percent 
                                             AA  A               B      C         D               E       F   *F+
   1 Less than              -0.20            5.4 5.4             5.4    5.4       5.4             5.4     5.4        6.2 
   2 -0.20                  -0.18            5.2 5.3             5.4    5.4       5.4             5.4     5.4        6.2 
   3 -0.18                  -0.16            5.1 5.2             5.4    5.4       5.4             5.4     5.4        6.2 
   4 -0.16                  -0.14            5.0 5.1             5.3    5.4       5.4             5.4     5.4        6.2 
   5 -0.14                  -0.12            4.9 5.0             5.3    5.4       5.4             5.4     5.4        6.2 
   6 -0.12                  -0.11            4.8 4.9             5.2    5.4       5.4             5.4     5.4        6.2 
   7 -0.11                  -0.10            4.7 4.8             5.1    5.3       5.4             5.4     5.4        6.2 
   8 -0.10                  -0.09            4.6 4.7             5.1    5.3       5.4             5.4     5.4        6.2 
   9 -0.09                  -0.08            4.5 4.6             4.9    5.2       5.4             5.4     5.4        6.2 
10   -0.08                  -0.07            4.4 4.5             4.8    5.1       5.3             5.4     5.4        6.2 
11   -0.07                  -0.06            4.3 4.4             4.7    5.0       5.3             5.4     5.4        6.2 
12   -0.06                  -0.05            4.2 4.3             4.6    4.9       5.2             5.4     5.4        6.2 
13   -0.05                  -0.04            4.1 4.2             4.5    4.8       5.1             5.3     5.4        6.2 
14   -0.04                  -0.03            4.0 4.1             4.4    4.7       5.0             5.3     5.4        6.2 
15   -0.03                  -0.02            3.9 4.0             4.3    4.6       4.9             5.2     5.4        6.2 
16   -0.02                  -0.01            3.8 3.9             4.2    4.5       4.8             5.1     5.4        6.2 
17   -0.01                          0.00     3.7 3.8             4.1    4.4       4.7             5.0     5.4        6.2 
18   0.00                           0.01     3.4 3.6             3.9    4.2       4.5             4.8     5.1        5.9 
19   0.01                           0.02     3.2 3.4             3.7    4.0       4.3             4.6     4.9        5.6 
20   0.02                           0.03     3.0 3.2             3.5    3.8       4.1             4.4     4.7        5.4 
21   0.03                           0.04     2.8 3.0             3.3    3.6       3.9             4.2     4.5        5.2 
22   0.04                           0.05     2.6 2.8             3.1    3.4       3.7             4.0     4.3        4.9 
23   0.05                           0.06     2.4 2.6             2.9    3.2       3.5             3.8     4.1        4.7 
24   0.06                           0.07     2.2 2.4             2.7    3.0       3.3             3.6     3.9        4.5 
25   0.07                           0.08     2.0 2.2             2.5    2.8       3.1             3.4     3.7        4.3 
26   0.08                           0.09     1.8 2.0             2.3    2.6       2.9             3.2     3.5        4.0 
27   0.09                           0.10     1.6 1.8             2.1    2.4       2.7             3.0     3.3        3.8 
28   0.10                           0.11     1.4 1.6             1.9    2.2       2.5             2.8     3.1        3.6 
29   0.11                           0.12     1.2 1.4             1.7    2.0       2.3             2.6     2.9        3.3 
30   0.12                           0.13     1.0 1.2             1.5    1.8       2.1             2.4     2.7        3.1 
31   0.13                           0.14     0.8 1.0             1.3    1.6       1.9             2.2     2.5        2.9 
32   0.14                           0.15     0.7 0.9             1.1    1.4       1.7             2.0     2.3        2.6 
33   0.15                           0.16     0.6 0.8             1.0    1.2       1.5             1.8     2.1        2.4 
34   0.16                           0.17     0.5 0.7             0.9    1.1       1.3             1.6     1.9        2.2 
35   0.17                           0.18     0.4 0.6             0.8    1.0       1.2             1.4     1.7        2.0 
36   0.18                           0.19     0.3 0.5             0.7    0.9       1.1             1.3     1.5        1.7 
37   0.19                           0.20     0.2 0.4             0.6    0.8       1.0             1.2     1.4        1.6 
38   0.20                or more             0.1 0.3             0.5    0.7       0.9             1.1     1.3        1.5 
*The emergency solvency surcharge rate (1.15 times the rate the employer would have paid in Schedule F, rounded to the 
nearest tenth).

                                         e-Services for Business 
     e-Services for Business provides employers and their agents with the ability to request rate informatio  
               online and also the ability to obtain an electronic DE 428T.  To begin the enrollment process  
                         go toe-Services for Bussiness (edd.ca.gov/e-Services_for_Business) 
                         For assistance with e-Services for Business, please call 1-855-866-2657

   The EDD is an equal opportunity employer/program. Auxiliary services and services are available upon request to 
     individuals with disabilities. Requests for services, aids, and/or alternate formats need to be made by calling 
                                    1-888-745-3886 (voice) or TTY 1-800-547-9565. 

DE 2088C Rev. 47 (11-19) (INTERNET)                        -4-

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