# 20 CFR § 345.303 - Computation of rate.

(a) With respect to compensation in a calendar year that begins after December 31, 1992, the Board will compute, by October 15, 1992, and by October 15 of each subsequent year, a contribution rate for each employer (other than a new employer) in accordance with the following 8-step process:

(1) Step 1. Compute the employer's benefit ratio as of the preceding June 30;

(2) Step 2. Compute the employer's reserve ratio as of the preceding June 30 and subtract it from the benefit ratio;

(3) Step 3. Subtract the pooled credit ratio (if any) for the calendar year;

(4) Step 4. Multiply the Step 3 result by 100, in order to obtain a percentage rate, and then round such rate to the nearest 100th of one percent. If the rate so computed is zero or less than zero, the percentage rate will be deemed zero at this point;

(5) Step 5. Add 0.65 (the administrative charge) to the percentage rate computed through Step 4.

(6) Step 6. Add the surcharge rate (if any) for the calendar year;

(7) Step 7. Add the pooled charge ratio (if any) for the calendar year, as computed to four decimal places and multiplied by 100;

(8) Step 8. If the rate computed through Step 7 is greater than 12 percent (or 12.5 percent if a surcharge of 3.5 percent is in effect for the calendar year), reduce the percentage rate so computed to 12 percent or 12.5 percent, if appropriate.

(b) The percentage rate computed under paragraph (a) of this section is the employer's rate of contribution for the calendar year in question.

(c)

(1) Any computation that is to be made under this section on the basis of a 12-quarter period ending on a given June 30 shall be made on the basis of a period beginning on January 1, 1990, or on the first day of the first calendar quarter that begins after the date on which the employer first began to pay compensation subject to this part, or on July 1 of the third calendar year preceding that June 30, whichever date is later, and ending on that June 30.

(2) The amount computed under paragraph (c)(1) of this section shall be increased to an amount that bears the same ratio to the amount so computed as 12 bears to the number of calendar quarters on which the computation is based.