By Tom Towson
Last updated: March 22, 2024
As state workforce agencies emerge from the financial stress caused by the COVID-19 pandemic, it is prudent for employers to monitor how this stress might impact their state unemployment insurance (SUI) tax rates. This regularly updated resource is intended to help provide employers insights into the condition of the SUI financing system and the potential impact to rates in 2024 and beyond.
Before addressing the condition of the SUI financing system, 2023 tax rates under the Federal Unemployment Tax Act (FUTA) are top of mind for employers as well.
For 2022, the U.S. Department of Labor, as of November 10, 2022, announced that California, For 2022, the U.S. Department of Labor, as of November 10, 2022, announced that California, Connecticut, Illinois, New York and the Virgin Islands had outstanding Title XII advances on January 1 for at least two consecutive years (2021 and 2022) and on November 10, 2022. As such, these jurisdictions were subject to a FUTA credit reduction for 2022. The net FUTA tax rate for 2022 increased by 50%, from 0.60% to 0.90% (the U.S. Virgin Islands had its FUTA tax credit reduced by 3.6% for an effective FUTA tax rate of 4.2%).¹
For 2023, the U.S. Department of Labor, as of November 10, 2023, announced that California, New York and the Virgin Islands had outstanding Title XII advances on January 1 for at least two consecutive years and on November 10, 2023. As such, these jurisdictions will be subject to a FUTA credit reduction for 2023. The net FUTA tax rate for 2023 will increase from 0.90% in 2022 to 1.20% in 2023 for California and New York and from 4.20% in 2022 to 4.50% in 2023 for the U.S. Virgin Islands.¹
For 2024, the U.S. Department of Labor issued its analysis of potential FUTA credit reductions. California, Connecticut, New York and the Virgin Islands had outstanding Title XII advances on January 1 for at least two consecutive years. As such, these jurisdictions are potentially subject to a FUTA credit reduction for 2024. The net FUTA tax rates for 2024 will potentially increase to 1.50% for California, Connecticut, and New York and to 4.80% for the Virgin Islands.¹
Advances to State Unemployment Funds² (Title XII of the Social Security Act)
The Average High Cost Multiple (AHCM) is a standard measure of the solvency of the SUI financing system using a primary factor, a state’s trust fund balance at a point in time. State trust funds are used to pay unemployment benefits. An AHCM multiple of 1.00 indicates a state trust fund is deemed sufficiently solvent and able to pay one year of benefits associated with an average recessionary period. As of January 1, 2024, 34 states were not considered adequately funded under this measure, compared to 37 as of January 1, 2023.³
Average High Cost Multiple (AHCM) (as of January 1, 2024)
A logical starting point for addressing the outlook for 2024 SUI tax rates is state unemployment trust fund balances, a primary factor in developing SUI tax rates.
As depicted in the following graph, net trust fund balances (trust fund balance net of federal Title XII advances) were negative $39.46 billion at the end of Q1 2011, as a result of the Great Recession, compared to negative $27.12 billion at the end of Q1 2021, as a result of the COVID-19 pandemic (i.e., $12.34 billion more solvent). By the end of Q1 2022, net trust fund balances rebounded and were positive for the first time since the COVID-19 pandemic. By the end of Q4 2023, net trust fund balances were positive $38.24 billion.⁴ There is still a long way to go before trust funds are at levels experienced just prior to the COVID-19 pandemic.
Historical Net Trust Fund Balances
Net trust fund balances were substantially higher pre-COVID than they were pre-Great Recession. Because of this and other factors, net trust fund balances did not reach the negative levels experienced during the Great Recession.
The following graph illustrates net trust fund balances by state as of December 31, 2023.⁴
Net Trust Fund Balances by State (descending order by state)
As state trust funds are depleted during a period of high or increased levels of unemployment, SUI tax rates have historically increased as well. However, the correlation is not immediate. There is typically a lag between when an economic downturn impacts SUI tax rates. This is because rating calculations typically take into consideration more than just a single year of experience and look back to historical experience in the development of rates. And since rates are issued annually, a full year can pass before rates are next adjusted.
As illustrated in the below graph, as net trust fund balances began to decline in 2009 as a result of the Great Recession, the average SUI tax rate in the U.S. did not hit its peak until 2012. After that peak, average rates declined for eight consecutive years through 2020. In addition:
From 2020 to 2021, the average SUI tax rate increased from 1.72% to 1.89% (a 9.9% increase).
From 2021 to 2022, the average SUI tax rate decreased from 1.89% to 1.74% (a 7.9% decrease).
From 2022 to 2023, the average SUI tax rate increased from 1.74% to 1.81 (a 4.0% increase). The 2023 average SUI tax rate is preliminary per U.S. DOL.
Correlation of Historical Average SUI Tax Rates to Net Trust Fund Balances⁴
The depletion of state trust funds can have negative implications not only to future SUI tax rates but also the amount of wages subject to those tax rates. Employers pay SUI tax on wages earned and paid to each employee within a calendar year up to a specified amount, known as the annual taxable wage base. Some states correlate annual taxable wage base adjustments to state trust fund balances.
Over the past 15 years (2010 to 2024), taxable wage bases have increased by an average of 2.8% annually.
During the height of the Great Recession (from 2008 to 2010), the two year average annual increase was 4.8%.
From 2020 to 2021, taxable wage bases increased by an average of 2.9%.
From 2021 to 2022, taxable wage bases increased by an average of 3.9%.
From 2022 to 2023, taxable wage bases increased by an average of 3.6%.
From 2023 to 2024, taxable wage bases increased by an average of 4.3%.
The following table provides historical taxable wage base trends.⁵
Annual SUI Taxable Wage Bases
The following table provides 2024 annual taxable wage bases by state (based on best available information):
Annual Taxable Wage Bases (2023 and 2024)
(1) The higher wage base only applies to employers assigned the maximum rate.
A - Actual wage base, assuming no law change.
E - Best estimate, assuming no law change.
The following contains examples of actions taken by states that could impact SUI tax rates in 2024 and beyond. These state summaries are for informational purposes only. Please see the state legislation and related materials for specific guidance.
Alabama Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Alabama 2024 SUI tax rates are dated December 12, 2023. Schedule A remained in effect, and the shared cost, a constant added to all employers' rates, remained 0.00%. The rates range from 0.20% to 5.40%. The taxable wage base remained at $8,000.
Alaska Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Contribution rates in Alaska for 2024 range from 1.00% to 5.4% for eligible employers, based on payroll decline experience. For 2024, the average benefit cost rate used to determine the rates is 0.013368 and the actual calculated trust fund solvency adjustment is 0.040977. The average tax rate is 1.00% and the employee tax rate is 0.50%. The standard rate is 1.66%. Rates for new employers depend on NAICS classification. The taxable wage base for 2024 is $49,700 (from $47,100 in 2023).
The legislation makes numerous changes to the state's unemployment insurance law as summarized below:
New employer rate. Effective January 1, 2024, the new employer SUI tax rate is reduced from 2.9% to 1.9%.
Stabilization rate. Beginning in fiscal year 2024, the SUI tax stabilization rate is reduced from 0.2% to 0.125%. The stabilization rate will be recharacterized as an administrative assessment.
Penalty rate. Effective January 1, 2024, the penalty rate for failure to make timely SUI tax payments is reduced from 14% to 10%.
Tax Rates. Eliminates the 12% and 14% tax rates for deficit-rated employers.
Taxable wage base. Effective January 1, 2024, the SUI taxable wage base will be $7,000 if the unemployment trust fund balance is more than $600 million as of June 30 of the most recently completed state fiscal year. Since the trust fund balance was more than $600 million, the wage base will be $7,000.
The experienced employer tax rates will range from 0.225% to 10.125% (0.1% to 14.0% in 2023).
Arkansas Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Arkansas 2024 SUI tax rates are dated February 6, 2024. The basic rate table remained the same and the stabilization tax rate decreased from 0.200% to 0.125% due to legislation. The stabilization tax rate will be recharacterized as an administrative assessment. This change in the stabilization tax rate was in effect for July 1, 2023 to June 30, 2024, so there was a decrease in 2023 rates for third and fourth quarters of 2023 and now the first and second quarters of 2024. The stabilization tax rate will change to 0.100% effective July 1, 2024 for the third and fourth quarters of 2024; therefore, the total rate for the third and fourth quarters of 2024 will be 0.025% less than indicated on the notice. The set maximum rate was also reduced due to the legislation from the potential 14% to 10% (penalty rate for failure to make timely SUI tax payments) plus the stabilization tax rate. Rates range from 0.225% to 10.125%. The taxable wage base remained $7,000.
Arizona Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For 2024, rates for positive reserve ratio employers will range from 0.05% to 6.76%. An employer with a reserve ratio of zero pays at a rate of 7.02%. Negative ratio employers will pay rates ranging from 7.41% to 14.03%. New employers will continue to pay 2.0%. The taxable wage base remains $8,000.
The bill earmarks $250 million from the General Fund to the Employment Development Department (EDD) to pay towards an outstanding balance of advances under Title XII of the Social Security Act (SSA) for unemployment benefit claims during the COVID-19 pandemic. The bill also notes that the legislature intends to appropriate $500 million in the 2024 budget bill to provide relief to small businesses as result of anticipated tax rate increases due to the FUTA credit reduction.
California Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Schedule F+, with rates ranging from 1.5% to 5.9% for positive-balance employers (including zero reserve ratio) and 6.2% for all negative-balance employers, continues in effect in California for calendar year 2024. New employers continue to pay 3.4% in 2024 as well. There is also a 0.1% extra Employment Training Tax for positive-balance employers, which is deposited in the Employment and Training Fund. In addition, voluntary contributions are not permitted in 2024. The UI taxable wage base in California for 2024 remains at $7,000.
The legislation incrementally increases Colorado's unemployment taxable wage base to $30,600 by calendar year 2026. The wage base increased to $20,400 in 2023 (from $17,000 in 2022), $23,800 in 2024, $27,200 in 2025, and $30,600 in 2026. Each year thereafter, the wage base will be adjusted by the change in average weekly earnings.
The law amends Colorado's unemployment law to extend the hold on an employer's solvency surcharge through calendar year 2023. The solvency surcharge may be reinstated in 2024.
The legislation states that in order to comply with federal unemployment law, the state is reducing employer premium rates by 10% across all rates in the standard premium rate schedule, which is offset by a corresponding increase to a new support surcharge rate. Also, the bill expands the authorized use of money in the Title XII of the Social Security Act Repayment Fund to allow the state's Unemployment Insurance Division in the Department of Labor and Employment (CDLE) to use the money for costs associated with bonds or notes issued by the division, including interest on the bonds or notes. Finally, the bill eliminates the requirement for employers to submit premium reports to the UI Division and instead requires employers to submit wage reports.
Colorado Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $23,800 ($20,400 in 2023). New employer tax rate: 3.05% (1.70% in 2023). New general construction tax rate: 3.08% (1.70% in 2023). New heavy construction tax rate: 8.06% (6.82% in 2023). New employer trades tax rate: 3.08% (1.86% in 2023). Political subdivision group tax rate: 0.20% (unchanged from 2023). Solvency surcharge: The state's solvency surcharge is in effect in 2024. It was suspended in 2023. The state posted the 2024 rate tables on its website.
The state of Colorado originally released their rates on December 8, 2023 but shortly thereafter the state discovered an issue with their new rate tables. Due to this issue, the state has decided to reissue rates to ALL employers for 2024. The revised/corrected 2024 rate notices were dated January 29, 2024 and were released by the state, but the way that the ratios were reflected was not correct so the state has since released a final rate revision dated February 23, 2024. The state is not mailing the new notices dated February 23, 2024, they must be obtained manually from the state website. The base rate schedule for reserve ratio 0.000 to 0.004 is in effect, in addition there is a Solvency Rate included in all rates resulting in higher rates than last year. The rates range from 0.81% to 12.34%. The taxable wage base increased to $23,800 (from $20,400 in 2023).
The law increases the unemployment taxable wage base from $15,000 to $25,000, beginning January 1, 2024. Each year thereafter, the wage base will be indexed for inflation.
The bill also expands the range of experienced unemployment tax rates from 0.1% to 10%, beginning January 1, 2024. Other provisions that will take effect on January 1, 2024 include: not charging employers for unemployment benefits claimed through the state's shared work program during periods of high unemployment and capping the fund solvency tax at 1.0%. During a period of economic recession, the maximum solvency tax rate will be reduced to 0.5%, according to the bill. Beginning January 1, 2022, the legislation will require the Connecticut Department of Labor to adjust the benefit ratio for each employer in an industry sector (based on the North American Industry Classification System) downward by 50% of the average increase in that sector if the average benefit ratio for all employers within that sector increases over the prior calendar year's average by 0.01 or greater. In addition, the legislation temporarily changes the lookback period for determining an employer's unemployment experience rating. The lookback period has historically been three consecutive years preceding the computation date. For 2026, the lookback period will be one year. For 2027, the lookback period will be two years.
Connecticut Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Pursuant to HB 6633 passed in 2021, the unemployment taxable wage base in 2024 will increase to $25,000 from $15,000. Tax rates will range from 1.1% to 7.8% (changed from the 2023 range of 1.7% to 6.6%). The rates include the fund solvency rate of 1% for 2024. Only benefit charges and taxable wages for July 1, 2021 to June 30, 2023 are used to compute the 2024 rates.
The legislation addresses the state's calendar year 2024 unemployment tax rates and continues the temporary relief provided in calendar year 2023 to employers who pay unemployment tax assessments through 2024. HB 236 extends the special one-year schedule of rates into 2024 so that SUI tax rates will continue to range from 0.1% to 5.4% (0.3% to 8.2% in 2023). It also will continue to reduce new employer tax rates, and keep overall employer tax rates consistent with calendar year 2023, providing that the average employer assessment rate, the average industry assessment rate, and the average construction industry assessment rate will all be 1%. It reduces the maximum earned rate and continues the use of the temporary simplification of the tax rate schedules that are used to calculate unemployment assessments paid by employers. It additionally provides for federal pandemic funds to be used to replenish the Unemployment Trust Fund, allowing the Delaware Department of Labor to implement unemployment tax relief for an additional one-year period. It is estimated that these unemployment tax assessment changes will reduce the tax obligation of employers by an estimated $50 million. Finally, the new law restructures the supplemental assessment that is currently being collected from all employers, keeping the rate of 0.2%, but depositing it in the Special Administration Fund instead of the UI Trust Fund. Uses of the Special Administration Fund are expanded to include future technology needs of the Department.
Delaware Announcement Relating to 2024 Unemployment Tax Rates The Delaware 2024 Rate notices were originally issued on January 5, 2024. It was discovered after release that there was an issue with the notices and the state has decided to reissue rates to ALL employers. The state of Delaware reissued the rates on February 1, 2024. The State Experience Factor remained 35, and the Supplemental Rate remained 0.2%. In addition to the rate, all employers are assessed a 0.15% Training Tax based on taxable payroll and billed twice a year. The rates range from 0.3% to 5.4%. The taxable wage base remains $10,500.
The legislation changes how Florida’s UI tax rate is computed for rates effective 2022 through 2025.
Tax rates effective January 1, 2023 through December 31, 2025, will exclude charges from the second, third and fourth quarters of 2020 and all benefit charges paid as a direct result of a government order to close or reduce capacity of a business due to COVID-19, as determined by the Department of Economic Opportunity. The tax rate calculation will also exclude the application of the positive adjustment factor (trust fund trigger). Lastly, benefit charges from the first and second quarters of 2021 may be decreased if the Office of Economic and Demographic Research (EDR) estimates total tax collection for rate year 2022 will exceed $475.5 million. These changes to the tax rate calculation are repealed if the trust fund reaches $4,071,519,600 on June 1. On June 1, 2023, the trust fund was $2,953,834,695, per TreasuryDirect.
The new legislation required the state to make three deposits during 2021 to the UI trust fund. The funding comes from online sales tax collected from out-of-state e-commerce companies. In addition, beginning July 2022, and on or before the 25th day of each of the following months, the Florida Department of Revenue will distribute $90 million monthly to the state's UI trust fund. The Department is required to end monthly distributions when the Department of Revenue receives certification from EDR that the ending balance of the UI trust fund exceeds $4,071,519,600 or on December 31, 2025, whichever is earlier.
Florida Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Florida 2024 SUI tax rates are dated December 21, 2023. The minimum rate is 0.10% and the maximum rate is 5.4%, except that employers participating in the short-time compensation program may be subject to a maximum rate of 6.4%. New employers pay 2.7% in 2024. The final adjustment factor remained 0.000 and the multiplier decreased to 0.1591 for 2024. The taxable wage base remains at $7,000.
The bill reinstates the 0.06% administrative assessment which will be in effect for all experience rated employers. This assessment applies to the time frame of January 1, 2024 through December 31, 2026. It is set to expire as of January 1, 2027. The administrative assessment does not apply to reimbursing employers and those assigned a minimum or maximum rate. The new employer rate has been reduced to 2.64% to account for the assessment, resulting in a total rate of 2.70% for experience based employers. The total new employer rate for non-profit employers will be 2.64%.
Georgia Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Georgia 2024 SUI tax rates are dated January 2, 2024. The base rate adjustment factor remained 50%, but the rates decreased slightly for most brackets. The Administrative Assessment increased from 0.00% to 0.06% for all employers except those employers with minimum and maximum rates, government employers and non-profit organizations. The rates range from 0.04% to 8.10%. The taxable wage base remains at $9,500.
Hawaii’s Employment Security Law, as it relates to the adequate reserve fund, has been amended. Effective for the calendar years 2023 through 2030, "adequate reserve fund" means an amount that is equal to the amount derived by multiplying the benefit cost rate that is the highest during the 10-year period ending on November 30 of each year by the total remuneration paid by all employers, with respect to all employment for which contributions are payable during the last four calendar quarters ending on June 30 of the same year, as reported on contribution reports filed on or before October 31 of the same year, but does not include the benefit cost rate from June 2020 through August 2021.
The bill establishes the Unemployment Insurance Technology Special Fund and requires an assessment. All employers are subject to a 0.01% assessment for the special fund that will be used to operate and maintain the unemployment information technology infrastructure used for the payment of benefits and contributions.
Hawaii Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For 2024, Schedule D of the rate table continues to be in effect in Hawaii. Contribution rates for positive reserve ratio employers range from 0.2% to 3.0% and contribution rates for negative reserve ratio employers range from 3.4% to 5.8%. The Employment & Training Assessment remains at 0.01%. New employers pay 3.0% in 2024. The taxable wage base will be $59,100 for 2024 (from $56,700 in 2023).
Idaho Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $53,500 ($49,900 in 2023). New employer rate: 1.231% (1.0% in 2023). Experienced employer tax rate range: 0.352% to 1.172% for positive class employers and 2.110% to 5.4% deficit class employers (0.207% to 0.691% for positive class employers and 1.245% to 5.4% for deficit class employers in 2023). See below HB 428, which may adjust some of the foregoing.
The law adjusts the unemployment insurance desired fund size multiplier from 1.3 to 1.2, which is likely to reduce unemployment insurance tax rates for 2024. The Idaho Department of Labor will send out revised rate notices to employers in late March of 2024.
Illinois Announcement Relating to 2024 Unemployment Tax Rates For calendar year 2024, the adjusted state experience factor is 126% and the benefit conversion factor remains at 138.4%. Total rates range from 0.850% to 8.650%, including the 0.55% fund building factor in effect for 2024. An employer whose contribution rate is 5.40% or higher and whose total quarterly wages are less than $50,000 pays contributions at 5.40% in that quarter. New employers pay 3.950% for 2024. There are no NAICS-rated sectors in 2024 that will pay a higher entry rate. The taxable wage base will be $13,590 for 2024 (from $13,271 in 2023).
The law creates a new tax rate Schedule C (former Schedule E) which is to remain in effect through 2025. The rates range from 0.50% to 7.40%.
Indiana Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Indiana 2024 SUI tax rates are dated January 3, 2024. Schedule C remained in effect and the rates range from 0.50% to 7.40%. Penalty rates range from 2.50% to 9.40%. The taxable wage base remains at $9,500.
Iowa Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Iowa’s unemployment insurance tax rates for 2024 will remain unchanged from 2023. Rates will continue to be determined under Rate Table 8 in 2024 and will range from 0.0% to 7.0%. New non-construction employers will pay 1.0% and new construction employers will pay 7.0% in 2024. The taxable wage base in Iowa for 2024 will be $38,200, up $2,100 from the taxable wage of $36,100 in 2023.
Kansas Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $14,000 (unchanged from 2023). New employer tax rate: 2.7% (unchanged from 2023). New-construction employer tax rate: 6.0% (unchanged from 2023). Governmental employers: 0.1% (unchanged from 2023). Experienced employer tax rate range: 0.16% to 6.0% (0.17% to 6.4% in 2023).
Kentucky Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $11,400 ($11,100 in 2023). Tax rate schedule: Schedule A (unchanged from 2023). Experienced employer tax rate range: 0.3% to 2.4% for positive rated employers and 6.5% to 9.0% for negative rated employers. New employer tax rates: 2.7% for new employers (unchanged from 2023) and 9.0% for new construction employers (unchanged from 2023).
Louisiana Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $7,700 (unchanged from 2023). Experienced employer tax rate range: 0.09% to 6.2% (unchanged from 2023).
Maine Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The 2024 employer tax schedule will remain under the lowest schedule, Schedule A. Contribution rates in Maine for 2024 are adjusted by a 0.13% Competitive Skills Scholarship Fund (CSSF) rate and a 0.15% UPAF rate that are now in effect. As adjusted, rates for 2024 range from 0.00% to 5.75%. New employers pay a combined total rate of 2.32% for 2024. The taxable wage base will remain at $12,000.
Maryland Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $8,500 (unchanged from 2023). New employer tax rate: 2.6% (2.3% in 2023). New construction employers headquartered in another state: 3.3% (5.1% in 2023). Experienced employer tax rate range: 0.3% to 7.5% under Table A (1.0% to 10.5% in 2023 under Table C).
Massachusetts Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Massachusetts 2024 SUI tax rates were issued on January 2, 2024. The rate schedule increased to schedule C and the Solvency Assessment rate increased from 0.37% to 0.41%. The additional COVID-19 Recovery Assessment is also in effect and has decreased from 126.4% to 40.15%. These changes resulted in lower rates for most employers. All employers are assessed the Workforce Training Rate of 0.056% that is included in the total rate. The Covid Recovery Assessment rates are applied to all except New Employers. The contributions for these rates are calculated as a separate item on the quarterly contribution report. The rates range from 1.079% to 15.665%. The taxable wage base remained $15,000.
Michigan Announcement Relating to 2024 Unemployment Rates and Wage Base Contribution rates for employers with three or more years of experience will continue to range from 0.06% to 10.3% in 2024. The maximum rate of 10.3% includes a 6.3% maximum chargeable benefit component, a 3.0% maximum account building component, and a 1.0% maximum nonchargeable benefits component. Note that if the employer has submitted no quarterly tax reports, that employer's maximum tax rate will be 10.3%, and the employer also will be assessed a penalty of 3.0%, which is separate from the contribution rate. In addition, the new employer rate remains at 2.7%, plus part of its chargeable benefits component depending on the employer’s year of liability, except for new construction employers. In addition, the taxable wage base will remain at $9,500 for 2024.
The nonchargeable benefits component (NBC) for 2024 may range from 0.06% to 1.0%, depending upon an employer's experience. For an employer with no benefit charges for nine years, the NBC is 0.06%. For an employer with no benefit charges for eight years, the NBC will be 0.07%. For an employer with no benefit charges for seven years, the NBC will be 0.08%. For an employer with no benefit charges for six years, the NBC will be 0.09%. For an employer with no benefit charges for five years, the NBC will be 0.1%. For all other employers, the NBC is 1.0%.
The new legislation provides employers more time to file unemployment tax rate and claim appeals. Currently, employers have 20 days to file an appeal. Effective May 5, 2024, employers will have up to 45 days to file an appeal.
Minnesota Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Minnesota 2024 SUI tax rates are dated December 12, 2023. The base rate remained 0.1%, and the Workforce Enhancement Fee of 0.1% remained the same. The rates range from 0.20% to 9.10% which includes the 0.1% Workforce Enhancement Fee. The taxable wage base increased to $42,000 for 2024 (from $40,000 in 2023).
Mississippi Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $14,000 (unchanged from 2023). New employer tax rate: 1.2% in the first year of business, 1.3% in the second year, and 1.4% in the third year (unchanged from 2023). Experienced employer tax rate range: 0.2% to 5.6% (unchanged from 2023).
Missouri Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For 2024, there will be a 12% Contribution Rate Adjustment (CRA) reduction, except for any employer whose calculated contribution rate under Section 288.120 is 6% or greater, then it will be a 10% CRA reduction. The rates will range between 0.00% and 6.75%. The new employer rate for nonprofit employers is 1.0% and the new employer rate for mining, construction, and all other employers is 2.376% for 2024. The taxable wage base in Missouri for 2024 will be $10,000, a decrease of $500 from the 2023 taxable wage base amount of $10,500.
Montana Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Montana 2024 SUI tax rates are dated December 19, 2023. For 2024, Schedule I remains in effect and there is also a 0.13% Administrative Fund Tax (AFT) for minimum rated employers and a 0.18% AFT for all other experience-rated employers. Rates range from 0.13% to 6.30%. The taxable wage base increased to $43,000 for 2024 (from $40,500 in 2023).
Montana Announcement Relating to 2024 Wage Base Beginning in 2024, employers will pay remuneration on the first $43,000 paid to each employee, up from $40,500 in 2023.
Nebraska has amended its Employment Security Law as follows:
Voluntary contributions. Voluntary contributions now may be submitted up to and including February 28 of a particular year. They were previously due no later than January 10.
Determinations of liability or combined tax rate. A notice of a determination of liability or combined tax rate now will be promptly given to the employer by either electronic notice or by mailing a notice to the employer's last-known address or the address of a representative designated in writing by the employer. The address of record of an employer will continue to be the address of record unless it is changed by the employer. An employer that becomes subject to the Employment Security Law on or after the effective date of L.B. 191 (May 26, 2023) will designate its preferred method of contact and designated representative, if any, at the time of its initial registration. An employer may change its election at any time.
Nebraska Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $9,000 ($24,000 for employers assigned the highest tax rate under category 20) (unchanged from 2023). New employer tax rate: 1.25% for non-construction and 5.40% for construction (unchanged from 2023). Experienced employer tax rate range: 0.0% to 5.40%. Although the range is unchanged from 2023, the rates in the individual categories from two through 19 have increased.
Nevada Announcement Relating to 2024 Wage Base The new employer tax rate remains 2.95%. The unemployment tax rates for experienced employers continues to range from 0.25% to 5.4% (consists of 18 rate classes). While the unemployment tax rates continue to range from 0.25% to 5.4% in 2024, an employer's tax rate may change based upon the new reserve ratio changes for the 18 rate classes. In addition, employers (except those assigned the maximum 5.4% tax rate) pay a 0.05% career enhancement program tax.
New Hampshire (fiscal year jurisdiction) Announcement Relating to 2023/2024 Unemployment Tax Rates New Hampshire Employment Security (NHES) has released an updated set of unemployment insurance tax rates to its website for the third quarter of 2023. The net rate will remain the same at a range of 0.1% to 1.7% for positive-rated employers, and from 3.3% to 7.5% for negative-rated employers. The new employer tax rate remains 1.7%.
NHES released its updated unemployment tax rate chart for the fourth quarter of 2023. The rate continues to include a 1.0% reduction to the tax rates of positive-rated employers on Schedule I, and a 0.5% inverse rate surcharge on the tax rates of negative-rated employers on Schedules II and III.
Unemployment tax rates for the first quarter of 2024 will not change. For the first quarter of 2024, the fund balance reduction remains at 1.0% and the inverse rate surcharge continues to be 0.5%. This means that the tax rate for new employers remains at 1.7%. Also, the tax rates for experienced employers continue to range from 0.1% to 1.7% for positive-rated employers (including the 1.0% fund balance reduction) and from 3.3% to 7.5% for negative-rated employers (including a 0.5% inverse rate surcharge).
The bill aims to assist employers affected by COVID-19. Specifically, the bill will assign the following unemployment tax rate tables through fiscal year 2024:
Table C (rates range from 0.5% to 5.8%) for fiscal year 2022 (from July 1, 2021 through June 30, 2022);
Table D (rates range from 0.6% to 6.4%) for fiscal year 2023 (from July 1, 2022 through June 30, 2023), unless calculations call for a lesser table to be in effect; and
Table E (rates range from 1.2% to 7.0%) for fiscal year 2024 (from July 1, 2023 through June 30, 2024), unless calculations call for a lesser table to be in effect.
New Jersey Announcement Relating to 2023/2024 Unemployment Tax Rates and Wage Base For the period of July 1, 2023, to June 30, 2024, rates are determined under Schedule E and range from 1.2% to 4.3% for positive-balance employers, with a special assigned rate of 5.4%, and from 6.1% to 7.0% for negative-balance employers, with a special assigned rate of 7.0%. New employers pay 3.4% during this period. Note that these are basic rates and do not reflect any subsidiary taxes or reductions. The taxable wage base for New Jersey is increasing from $41,100 to $42,300 for the 2024 calendar year.
The 2024 unemployment insurance rate for an employee is 0.03825%. The 2024 rate for an employee with a government or reimbursable employer is 0.00825%.
New Mexico Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The 2024 rates were issued on November 21, 2023. The Reserve Factor increased to 3.4528 and the Excess Claims multiplier remained 10%. The rates range from 0.33% to 6.40%. The taxable wage base increased to $31,700 for 2024 (from $30,100 for 2023).
New York Announcement Relating to 2024 Unemployment Tax Rates For 2024, the rate schedule in effect continues to be the column labeled “Less than 0%.” In this column, the rates range from 1.5% to 4.1% for positive-balance employers and from 5.2% to 8.9% for negative-balance employers. The full range of rates with the Normal, Subsidiary, and the Reemployment Service Fund taxes for 2024 are 2.1% to 9.9%. New employers pay a total rate of 4.1%, including the Subsidiary tax rate of 0.625% and the Reemployment tax rate of 0.075%.
New York Announcement Relating to Future Wage Bases New York has announced that future unemployment taxable wage bases are to increase as follows: (1) $12,500 in 2024; (2) $12,800 in 2025; and (3) $13,000 in 2026. After 2026, the wage base is permanently adjusted on January 1 of each year to 16% of the state average annual wage, rounded up to the nearest $100. The state average annual wage is established no later than May 31 of each year. The average annual wage cannot be reduced from the prior-year level.
New York Announcement Relating to Interest Assessment Surcharge In July of 2023, businesses across the state received Interest Assessment Surcharge (IAS) bills. IAS bill payments go toward paying down the interest on the state’s federal Title XII advances used to pay benefits to unemployed workers during the pandemic. The New York State Department of Labor is required by law to collect this payment annually from employers who make unemployment insurance contributions until the state’s debt is paid.
The IAS rate is based on the amount of federal interest due on September 30, 2023. The current rate is .18%, a reduction from last year’s rate of .23%. The IAS for employers is calculated using the wages subject to contributions for the current payroll year (the fourth quarter of 2021 through the third quarter of 2022) and multiplying those wages by the IAS rate of .18%.
North Carolina Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $31,400 ($29,600 in 2023). New employer tax rate: 1% (unchanged from 2023). Experienced employer rates: 0.06% to 5.76% (unchanged from 2023). State reserve tax: Not in effect for 2024.
North Dakota Announcement Relating to 2024 Unemployment Tax Rates and Wage Base North Dakota’s 2024 contribution rates will range from 0.08% to 1.21% for positive-balance employers and from 6.08% to 9.68% for negative-balance employers. The new employer rate for positive-balance non-construction employers will be 1.09% and the new employer rate for negative-balance non-construction employers will be 6.08%. The new employer rate for both positive-balance and negative-balance construction employers will be 9.68%. The 2024 taxable wage base is $43,800 for 2024 (from 40,800 in 2023).
Ohio Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $9,000 (unchanged from 2023). New non-construction employer tax rate: 2.7% (unchanged from 2023). New construction employer tax rate: 5.6% (unchanged from 2023). Experienced employer tax rate range: 0.4% to 10.1% (0.3% to 9.8% in 2023). Delinquency rate: 13.3% (12.9% in 2023). An additional mutualized rate of 0.5% will continue in 2024 for all employers.
The bill increases unemployment insurance penalties. Employers that fail to file contribution and wage reports on time will be subject to a $200 penalty, up from $100. The penalty for nonprofits will rise to $20 per day, up to a maximum of $200. The bill also renews the state unemployment insurance program’s technology reinvestment tax through 2027.
Oklahoma Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The state of Oklahoma will be releasing their rates at the end of September. The State Experience Factor that determines the ratios for each rate bracket remained 50. The Conditional Factor remained D. Due to the passage of SB 789, the state could assess a surcharge that could vary on a quarterly basis to replenish the trust fund to necessary levels. This is currently not in effect. Included in the total rate is a 5% OESC Technology Fund rate assessed on all except maximum rated employers. The rates will range from 0.3% to 9.2% (0.3% to 7.5% in 2023). The taxable wage base increased to $27,000, from $25,700 in 2023.
Oregon Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Oregon 2024 SUI tax rates were issued on November 15, 2023. The rate schedule increased from Schedule II to III, which will result in most rates increasing. With HB 3389, the state is using the 2020 computation period to compute 2024 rates. Therefore, the computation period will run from July 1, 2016 to June 30, 2019. Included in the total rate is a special payroll tax offset assessed to all but maximum rated employers. It is a 0.09% Supplemental Employment Department Administration Fund rate assessed for all four quarters. This does not increase the rate. It is just an offset. The rates range from 0.9% to 5.4%. The taxable wage base increased to $52,800 for 2024 (from $50,900 in 2023).
The legislation modifies requirements regarding the calculation and payment of unemployment insurance taxes to provide employers immediate and long-term relief. The legislation:
Provides that the experience rating used to determine an employer’s 2020 tax rate will also be used in 2022, 2023, and 2024;
Reduces fund adequacy percentages used to determine tax rate schedules; and
Extends from 10 years to 20 years the look-back period used to determine Unemployment Compensation Trust Fund solvency level and provides that 2020 and 2021 are not included in the 20-year look-back period.
Pennsylvania Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For calendar year 2024, the following unemployment compensation solvency measures are in effect: (1) the additional employer contribution is 0.6%; (2) the surcharge tax is 9.2%; (3) the interest factor tax is 0.0%; (4) the employee tax is 0.07%; and (5) the benefit reduction is 3.2%. The maximum state adjustment factor for 2024 is 0.75%.
Unemployment tax rates for experienced employers will continue to range from 1.4190% to 10.3734% in the 2024 tax year. These rates include a 9.2% surcharge and 0.6% additional contribution tax. The interest factor will not be in effect for 2024. Delinquent employers pay a basic rate that is 3.0% higher. The new non-construction employer rate will remain at 3.8220%, and the new construction employer rate will remain at 10.5924% in 2024. The new employer rates only include the 9.2% surcharge as the additional contribution tax does not apply to new employers. Employees must also make unemployment tax contributions. The employee unemployment tax withholding rate will be 0.07% in 2024 (unchanged from 2023). This withholding is deducted from all of the employee's taxable wages, not just up to the taxable wage base limit.
The taxable wage base remains $10,000 for 2024.
Puerto Rico Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Puerto Rico 2024 unemployment tax rates are dated December 18, 2023. The rate schedule increased to Schedule H. The total rate may not match the attached rate notice. Included in the total rate, all employers, except those assigned the maximum rate (5.4%), are assessed a surtax of 0.1% - 1.0% depending on their assigned rate. This surtax is included in the total rate. The contributions for this rate are calculated as a separate item on the quarterly contribution report. The total rates range from 3.5% to 5.4%. The taxable wage base remained $7,000.
Rhode Island Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Effective January 1, 2024, the UI tax rate schedule will be Schedule G, with tax rates ranging from 1.1% to 9.7%. The rate for new employers will be 1.0%, including the 0.21% Job Development Assessment. The UI taxable wage base for 2024 will be $29,200 for most employers and $30,700 for employers at the highest rate ($28,200 for most employers and $29,700 for employers at the highest tax rate in 2023).
South Carolina Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Unemployment tax rates for employers in 2024 will decrease or remain unchanged from their 2023 levels. Taxable wage base: $14,000 (unchanged from 2023). New employer tax rate: 0.41% (0.45% in 2023). Experienced employer tax rate range: 0.06% to 5.46% (unchanged from 2023). Although the minimum and maximum rates are unchanged, the rates in between classes 1 and 20 will be reduced by an average of 6.0%, compared to 2023 rates. As with 2023, there will continue to be no solvency tax surcharge imposed on employers in 2024.
New legislation signed on February 1, 2023, will cut employer contributions to unemployment by 0.5%. Specifically, the legislation creates a new tax schedule when the balance in the Unemployment Trust Fund at the end of the fiscal year is at or above an average high-cost multiplier (AHCM) of 1.5. An AHCM of 1.0 means enough funds exist to cover a full year of benefits during a recession. Currently, employer tax rates are based on the AHCM of the fund at the end of each fiscal year. Additionally, the bill adjusts the trigger point for a surcharge – this is an additional tax imposed when the balance of the fund drops below $11 million. The surcharge trigger will no longer be tied to a dollar amount, but to an AHCM ratio. Through December 31, 2023, Schedule A (rates range to 9.45%) is in effect when the AHCM is less than 1.60 and Schedule B (rates range to 9.3%) is in effect when the AHCM is greater or equal to 1.60.
Beginning January 1, 2024, Schedule A (rates range to 9.45%) is in effect when the AHCM is less than 1.60 and Schedule B (rates range to 9.3%) is in effect when the AHCM is less than 1.5 and greater or equal to 1.3, and Schedule C (rates range to 8.80%) is in effect when the AHCM is greater or equal to 1.5.
South Dakota Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For the 2024 tax year, South Dakota rates for experienced employers will decrease and move to Schedule C. Rates will range from 0% to 8.8%. A 0.02% administrative fee is in effect for any employer whose reserve ratio is less than 2.25%. An investment fee is also in effect and ranges from 0% to 0.53% depending on the employer's reserve ratio. New employer rates remain the same. The new non-construction employer rate for the first year of business is 1.2% and 1% for the second and third years of business. New construction employers in their first year of business will pay 6.0%. New construction employers in their second and third year of business will pay 3.0%. All new employers pay a 0.55% investment fee. The taxable wage base remains $15,000 in 2024.
Tennessee (fiscal year jurisdiction) Announcement Relating to Wage Bases By February 1 of each year, the Department must report to the state legislature the UI trust fund balance as of the prior December 31, for purposes of determining the SUI taxable wage base for the calendar year. If the UI trust fund balance on December 31 of any year is less than $900 million, the taxable wage base is $9,000. If the trust fund balance is above $900 million, but less than $1 billion on December 31, the taxable wage base is $8,000. If the trust fund balance exceeds $1 billion on December 31, the taxable wage base is $7,000.
Tennessee (fiscal year jurisdiction) Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Effective July 1, 2023 through June 30, 2024, Premium Rate Table 6 remains in effect. Employer rates range from 0.01% to 2.3% for positive-balance employers and from 5.0% to 10.0% for negative-balance employers. For the period beginning July 1, 2023 through June 30, 2024, the new employer rate in Tennessee for contributory employers remains at 2.7%. The 2024 taxable wage base for 2024 will remain at $7,000.
Texas Announcement Relating to 2024 Unemployment Tax Rates and Wage Base Taxable wage base: $9,000 (unchanged from 2023). Experienced employer tax rate range: 0.25% to 6.25% (0.23% to 6.23% in 2023). New employer tax rate: 2.7% (unchanged from 2023). Bond obligation: 0.0% (unchanged from 2023). Interest tax rate: 0.0% (unchanged from 2023). Replenishment Ratio: 1.22 (1.27 in 2023). Replenishment Rate: 0.15% (0.13% in 2023). The Employment and Training Investment Assessment (ETIA) remained 0.1%. Voluntary contributions: Permitted and must be postmarked or received by the TWC no more than 60 calendar days after the employer's annual tax rate notice date (sent to employers each December).
Utah Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For 2024, the minimum tax rate in Utah is 0.3% and the maximum tax rate is 7.3%. Employers who have not paid all contributions for the fiscal year ending June 30 may be assessed a delinquent payment surcharge of 1.0%, which is in addition to the overall tax rate. For 2024, the reserve factor is 1.10 and there is a social cost tax rate of 0.30%. The taxable wage base will increase to $47,000, up from $44,800 in 2023.
The bill sets limits on the social contribution rate and reserve factor for the next three years. For calendar year 2022 only, if the calculation of the social contribution rate under Subsection (2)(a) is greater than 0.003, the social contribution rate for that calendar year is 0.003. For calendar years 2023 and 2024 only, if the calculation of the social contribution rate under Subsection (2)(a) is greater than 0.004, the social contribution rate for that calendar year is 0.004. For calendar year 2022 only, the division may not set the reserve factor to be more than 1.1500; and for calendar years 2023 and 2024 only, the division may not set the reserve factor to be more than 1.2000.
Utah Announcement Relating to 2024 Unemployment Tax Rates The state of Utah released their 2024 rates on November 14, 2023. The Reserve Factor remained 1.10 and the Social Costs remained 0.3%. The factor increases were limited by HB 2002 to a Reserve Factor of 1.2 and a Social Cost of 0.4%; however, the limiters were not necessary since the calculated factors were lower. Rates range from 0.3% to 7.3% with a possible 8.3% for penalty rated employers. The taxable wage base increased to $47,000 for 2024 (from $44,800 for 2023).
Vermont Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Vermont 2024 Unemployment Rate Notices were released on June 27, 2023. The rate schedule remained Schedule I, and the ratios changed, rates range from 0.40% to 5.40%. Benefits charged and taxable payroll for calendar year 2020 have been removed from the rate calculation by the state. New employers pay 1.0%, while new out-of-state employers in certain industries pay as follows: 2.0% for employers involved in the construction of buildings; 4.1% for employers involved in heavy and civil engineering construction; and 2.8% for specialty trade contractors. The taxable wage base continues at $13,500 for the third and fourth quarters of 2023.
The taxable wage base will increase to $14,300 in 2024 (from $13,500 in 2023).
Virginia Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Virginia 2024 SUI tax rates were dated December 8, 2023. The Fund Balance Factor remained 55%, the Fund Building Charge remained 0.00%, and the Pool Cost Charge decreased from 0.03% to 0.00% for the 2024 rate year. The rates range from 0.10% to 6.20%. Most benefits were not charged to employers for fiscal years ending July 1, 2020 and July 1, 2021. The taxable wage base remains at $8,000 for 2024.
Virgin Islands Bill No. 33-0090 The bill (amending Title 24, chapter 12, sections 302 and 308 of the Virgin Islands Code) replaces the reserve ratio experience rating methodology with a payroll variation methodology to determine employer unemployment Insurance tax rates beginning January 1, 2024. With the new methodology, employers’ tax rates will be based on changes in payroll for the preceding twelve quarters. As an employer's payroll increases, the tax rate would be lowered, and the converse for employers that have decreasing payrolls.
Virgin Islands Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Virgin Islands 2024 tax rates are dated January 29, 2024. The Virgin Islands has changed to a Payroll Variation method of calculating the assigned tax rate for 2024, which is indicated in the top right of the Annual Tax Rate Notice. The jurisdiction will calculate the Base Contribution Rate annually and adjust it to the Total Contribution Rate, which is also the new employer rate. The Total Contribution Rate is 4.11% for 2024. Based on this Total Contribution Rate, the assigned tax rate for each employer is based on their payroll variation and assigned a Tax Rate Interval Group (TRIG) of 1 to 14 with the minimum rate not to be less than 0.4% or a maximum rate not to exceed 5.40%. The 2024 tax rates will range from 2.51% for a TRIG of 1 to 5.40% for a TRIG of 9 to 14 with varying rates for a TRIG of 2 to 8. This change has resulted in the rates increasing for all employers. An assigned 2024 tax rate of 4.11% could be a payroll variation calculated tax rate or a new employer rate if the account is newly liable. The new Annual Tax Rate Notice does not indicate this difference. The total rates range from 2.51% to 5.40%. The taxable wage base increased to $31,000 (from $30,200 in 2023).
The legislation has a number of provisions designed to provide unemployment tax relief to employers. The legislation sets the maximum social tax as follows: (1) 0.50% for 2021; (2) 0.75% for 2022; (3) 0.80% for 2023; (4) 0.85% for 2024; and (5) 0.90% for 2025 and suspends the solvency surcharge for 2021 to 2025. From February 8, 2021 until May 31, 2026, the 10% Voluntary Contribution Program (VCP) surcharge is not charged and the VCP payment deadline is extended to March 31. The minimum amount of a voluntary contribution must result in a recomputed benefit ratio at least two rate classes lower than the original rate class; and only employers who have moved up at least eight rate classes may use the program.
Washington State Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The Washington 2024 SUI tax rates are dated December 8, 2023. The Flat Social Cost rate, which determines the tax rates on the table, remained 0.60% for all rate classes. Rates range from 0.27% to 6.03% except for penalty rates. The penalty rates range from 1.25% to 8.15%. The state introduced a new rate table for employers with an established Deferred Payment Contract and no delinquencies. This rate table has rates assigned the social cost of Rate Class-40. The taxable wage base increased to $68,500 for 2024 (from $67,600 in 2023).
West Virginia Announcement Relating to 2024 Unemployment Tax Rates and Wage Base The West Virginia 2024 SUI tax rates are dated December 8, 2023. As a result of the Unemployment Trust Fund balance remaining less than 2.25% of the statewide total wages, Schedule C (the highest schedule under current law) remains in effect. Rates range from 1.50% to 8.50%. The taxable wage base increased to $9,521 for 2024 (from $9,000 in 2023).
Wisconsin Announcement Relating to 2024 Unemployment Tax Rates and Wage Base For 2024, Schedule D remains in effect. Rates (including the solvency rate) under Schedule D range from 0.00% to 12.0%. In addition, the rate for newly liable construction employers with payrolls of $500,000 and over is 3.10% for 2024 and the rate for newly liable construction employers with payrolls under $500,000 is 2.90%. The general new employer rate for 2024 is 3.25% for employers with payrolls of $500,000 and over and the general new employer rate is 3.05% for employers with payrolls under $500,000. The taxable wage base will remain unchanged at $14,000.
Wyoming Announcement Relating to 2024 Unemployment Tax Rates and Wage Bas The Wyoming 2024 SUI tax rates were dated December 29, 2023. The total of all three constant factors used in the rate computation remained 0.00% for most employers and increased from 0.14% to 0.15% for 2024 for employers with zero benefit charges, resulting in some slightly higher rates. Rates range from 0.00% to 8.50%. The taxable wage base has increased to $30,900 for 2024 (from $29,100 in 2023).
The COVID-19 pandemic caused a depletion of state unemployment trust funds used to pay unemployment benefits, prompting many states to take action to mitigate potential increases in tax rates. After eight years of declining SUI tax rates (on average), there was an upward spike in 2021, then a downward spike in 2022, then an upward spike in 2023. While it is prudent for employers to be aware of the direction of SUI tax rates using indicators like state unemployment trust fund balance trends, state legislative initiatives, and overall economic conditions (all considered to be “uncontrollable factors”), it continues to be important for employers to take their own actions (“controllable factors”) to help keep SUI tax rates and associated costs as low as possible by:
Diligently adjudicating unemployment claims
Auditing benefit charges and timely appealing those that appear improper
Ensuring all quarterly contribution and wage reports are filed timely
Identifying and reconciling any outstanding liabilities on state unemployment accounts
Utilizing available state-specific rating strategies to help lower SUI tax rates (e.g., voluntary contributions, joint account formation, negative write-off payments, payroll variation elections, etc.)
Even after rates have been calculated and assigned, there are actions that employers can take to help reduce 2024 SUI tax rates. Visit the Equifax blog titled: Planning Strategies to Help Reduce SUI Tax Burdens in 2023 and Beyond for additional insights.
To keep up-to-date, please visit our Employer Unemployment Insurance Resource Center. The site includes a 2024 Tax Guide intended to assist employers in identifying potential risks associated with increases in SUI tax costs from 2023 to 2024 (e.g., changes in minimum and maximum SUI tax rates, changes in wage bases, etc.).
Please reach out to your Equifax representative to help address potential risks associated with the current unemployment landscape. Not a current client? Please feel free to contact our Employment Tax Consulting Group with any questions.
Per the FUTA Credit Reduction site published by the United States Department of Labor (“DOL”) Employment & Training Administration.
Per data obtained from FiscalData (an official website jointly created by the U.S. Department of the Treasury and the Bureau of the Fiscal Service).
Per U.S. DOL, SUI Trust Fund Solvency Report for 2023 (issued March 2023). The Average High Cost Multiple (AHCM is measured as the Reserve Ratio (Trust Fund as a % of Total Wages) at the end of the calendar year immediately preceding the report year, divided by the Average High Cost Rate. The Average High Cost Rate is the average of the three highest calendar year benefit cost rates in the last 20 years (or a period including three recessions, if longer).
Per respective Unemployment Insurance Data Summary reports published by the U.S. Department of Labor and data obtained from FiscalData, TreasuryDirect (an official website of the U.S. Department of Treasury), and Average Employer Contribution Rates by State.
Information obtained from sources considered to be reliable (e.g., state legislative changes, state workforce agency announcements, state surveys, etc.).
The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel. Equifax Workforce Solutions provides services that can help employers reduce their compliance risks. Details on our provision of these services and related support will be contained in your services agreement. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.
About the Author
Job Title: Managing Director, Employment Tax Consulting
Tom Towson is a Certified Public Accountant. He graduated cum laude from Missouri State University with a Bachelor of Science in accounting and from the University of Missouri — St. Louis with a master’s degree in accounting (emphasis in taxation). He joined Equifax Workforce Solutions in 2011 and specializes in employment tax matters (primarily focused on state unemployment insurance) associated with mergers and acquisitions, tax, strategic planning, and helping develop leading practices.
Before joining Equifax, Mr. Towson served as Chief Financial Officer of a St. Louis-based manufacturing firm, managing all aspects of the company’s financial matters, including income and employment tax functions during his five-year tenure. He spent the prior 16 years with a St. Louis-based public accounting firm where he was the shareholder in charge of taxation services.