By Tom Towson
Last updated: March 10, 2025
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 federal (FUTA) and state unemployment insurance (SUI) tax rates. This regularly updated resource is intended to help provide employers insights into the condition of the unemployment insurance financing system and the potential impact to rates in 2025 and beyond.
Before addressing the condition of the SUI financing system, 2024 tax rates under the Federal Unemployment Tax Act (FUTA) are top of mind for employers as well.
The U.S. Department of Labor issued its final analysis of FUTA credit reductions for 2024. Four jurisdictions faced a potential FUTA credit reduction in 2024. However, one of these jurisdictions (Connecticut) repaid their outstanding advances before November 10, 2024, thereby avoiding a FUTA credit reduction. Two jurisdictions (California and New York) had an outstanding advance on each January 1 from 2021 through 2024, and did not repay all their advances before November 10, 2024. Therefore employers in these states face a 0.9% credit reduction, resulting in a net FUTA rate of 1.5%. The U.S. Virgin Islands had an outstanding advance on each January 1 from 2010 through 2024, and did not repay all outstanding advances before November 10, 2024. The U.S. Virgin Islands applied for a waiver of the fifth year (BCR) add-on and was determined to be eligible for the waiver, therefore employers in the U.S. Virgin Islands will face a 4.2% credit reduction, resulting in a net FUTA rate of 4.8%.¹ Net 2024 FUTA tax rates (including a FUTA credit reduction) can be summarized as follows:
Advances to State Unemployment Trust Funds² (Title XII of the Social Security Act)
The California Legislative Analyst’s Office (a nonpartisan office that provides fiscal and policy information and advice to the Legislature) issued a report titled “Fixing Unemployment Insurance” in December of 2024. The Executive Summary states:
The State’s Unemployment Insurance (UI) Financing System Is Broken. The state’s UI program is supposed to be self-sufficient—that is, the system should collect enough funds to pay for benefits over time. This means, in some years, the system will collect more than necessary so that, during most economic downturns, there is enough money to pay for rising benefit costs. That system is broken: tax collections routinely fall short of covering benefit costs. (The state’s fiscal problems are unrelated to the widespread fraud that affected temporary federal UI programs during the pandemic.) Both our office and the administration expect these annual shortfalls to continue for the foreseeable future. Under our projections, deficits would average around $2 billion per year for the next five years. This outlook is unprecedented: although the state has, in the past, failed to build robust reserves during periods of economic growth, it has never before run persistent deficits during one of these periods.
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 2025 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 2024, net trust fund balances were positive $42.98 billion.⁴ There is still a long way to go before trust funds are at levels experienced just prior to the COVID-19 pandemic but have reached levels experienced just prior to the Great Recession.
Historical Net Trust Fund Balances⁴ (Q1 2007 to Q3 2024)
Net trust fund balances were substantially higher pre-COVID than they were pre-Great Recession. Because of this and other factors (e.g., the COVID pandemic did not last as long as the Great Recession), 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, 2024.⁴
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. After 2020, average SUI tax rates in the U.S. fluctuated slightly:
Correlation of Historical Average SUI Tax Rates to Net Trust Fund Balances⁴ (Q4 1998 to Q4 2024)
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.
The following table provides historical taxable wage base trends.⁵
Annual SUI Taxable Wage Bases
The following table provides 2025 annual taxable wage bases by state (based on best available information):
Annual Taxable Wage Bases (2024 and 2025)
(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 2025 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 2025 Unemployment Tax Rates and Wage Base Schedule A remains in effect, and the shared cost, a constant added to all employers' rates, remained at 0.00%. The rates range from 0.20% to 5.40%. The taxable wage base remains at $8,000.
Alaska Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Contribution rates in Alaska for 2025 range from 1.00% to 5.4% for eligible employers, based on payroll decline experience. The average tax rate is 1.00% and the employee tax rate is 0.50%. The standard rate is 1.50%. Rates for new employers depend on NAICS classification.
Effective January 1, 2025, employers will pay unemployment taxes on the first $51,700 paid to each employee, up from $49,700 in 2024.
Arizona Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Tax rates for experience-rated employers range from 0.04% to 9.72% in 2025 (0.05% to 14.03% in 2024). The tax rate for new employers remains 2.00% for 2025. The taxable wage base remains $8,000 for 2025.
Arkansas Announcement Relating to 2025 Unemployment Tax Rates and Wage Base For 2025, Arkansas contribution rates range from 0.200% to 10.100% (0.225% to 10.125% in 2024) and the new employer rate will be 2.0%, 1.9% plus the administrative assessment (2.025% in 2024). The administrative assessment fee, which replaced the stabilization rate, is reduced to 0.1% for 2025 (down from 0.125% in 2024). The taxable wage base remains $7,000.
California Announcement Relating to 2025 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 2025. 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 2025. The UI taxable wage base in California for 2025 remains $7,000.
Colorado Announcement Relating to 2025 Unemployment Tax Rates The rate tables currently in effect will continue to be in effect in 2025. Contribution rates in Colorado for 2025 will be set by the column providing for reserve ratios from “0.000 to 0.004.” Standard premium rates range from 0.64% to 3.69% for positive employers and from 4.74% to 8.68% for negative employers, with unrated employers paying 1.53%. Support surcharge rates for 2025 range from 0.07% to 0.41% for positive employers and from 0.53% to 0.96% for negative employers, with unrated employers paying 0.17%. Solvency surcharge rates in 2025 range from 0.1% to 1.1% for positive employers and from 1.425% to 2.7% for negative employers, with unrated employers paying 1.350%. Added together, the base rate, support rate, and the solvency surcharge rate provide the total combined rate for employers in 2025.
New employer rates consist of the beginning rate, the support rate, and the solvency surcharge rate. These combined rates will be as follows for 2025: 3.05% for non-construction (unchanged from 2024), 3.08% for general construction (unchanged from 2024), 8.055% for heavy construction (unchanged from 2024), 3.08% for trades (unchanged from 2024), and 0.2% for political subdivision group rate (unchanged from 2024).
Colorado SB 20-207 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.
Connecticut HB 6633 and SB 210 In an effort to improve Connecticut’s Unemployment Insurance (UI) Trust Fund solvency, the legislature passed two bills to implement reforms that were achieved through a collaborative effort of business and labor. Changes to the tax and benefit system, plus the inclusion of indexing various tax and benefits measures, will promote long term UI Trust Fund solvency; reduce employer costs; build in cost predictability to support employer fiscal planning; and stabilize UI benefit payments to unemployed workers.
Under the two bills, the following UI Tax changes are effective January 1, 2025:
Examples of Contribution Rate calculation for calendar year 2025:
Employer A is eligible to receive a charged rate, which is calculated based on the amount of UI benefits charged to their account divided by the taxable payroll reported. The employer has the following UI benefit charges and taxable wages and is not eligible for an industry sector benefit ratio adjustment:
Employer B is eligible to receive a charged rate, has the following UI benefit charges and taxable wages and is eligible for an industry sector benefit ratio adjustment of 0.006:
Delaware Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The State Experience Factor of 35 changed to the new Schedule B, and the supplemental rate remained 0.2%. In addition to the above rate, all employers are assessed a 0.126% Training Tax based on their taxable payroll and billed twice a year. The rates range from 0.6% to 6.5%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $12,500 paid to each employee, up from $10,500 in 2024.
Delaware HB 433 Delaware has enacted legislation that will increase the taxable wage base as follows: $12,500 for 2025, $14,500 for 2026, and $16,500 for 2027 and thereafter.
The bill also establishes two possible Assessment Rate Schedules, A & B, for rate years 2025 and 2026 with rates ranging from 0.3% - 5.4% and 0.4% to 5.4%, respectively.
In addition, the bill revises the experience rating methodology for assigning unemployment assessment rates to employers under the Unemployment Insurance Code in Delaware, replacing the current benefit wage ratio methodology with the benefit ratio methodology used by 19 other states. The change in methodology will become effective beginning in 2027. The bill also establishes new Benefit Ratio Assessment Rate Tables A-H which will go into effect with the 2027 rate year with minimum rates ranging from 0.2% to 1.21% depending on the table to a maximum rate of 5.4%.
District of Columbia Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Tax rates will continue to be determined under Table VI for employers with an experience rating. Rates range from 1.9% to 4.4% for positive-rated employers and from 6.2% to 7.4% for negative-rated employers in 2025. Newly liable employers pay a tax rate of 2.7%, unchanged from 2024. Employers also pay the same 0.2% Administrative Assessment Fee as last year. The taxable wage base remains at $9,000.
Florida Announcement Relating to 2025 Unemployment Tax Rates and Wage Base 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 2025. The multiplier decreased from 0.1591 to -0.3889. The final adjustment factor decreased from 0.0000 to -0.0001; however, the minimum rate cannot be less than 0.10%. The taxable wage base remains at $7,000 for 2025.
Florida SB 50 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, 2024, the trust fund was $4,462,719,250, 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.
Georgia Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The Base Rate Adjustment Factor remains at 50%, and the rates remain the same. The Administrative Assessment remained 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 for 2025.
Georgia SB 160 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%.
Hawaii Announcement Relating to 2025 Unemployment Tax Rates and Wage Base For 2025, Schedule C of the rate table will be in effect in Hawaii for UI purposes. Contribution rates for positive reserve ratio employers range from 0.0% to 2.4% and contribution rates for negative reserve ratio employers range from 2.8% to 5.6%. The Employment & Training Assessment remains at 0.01%. New employers pay 2.4% in 2025.
Effective January 1, 2025, employers will pay unemployment taxes on the first $62,000 paid to each employee, up from $59,100 in 2024.
Hawaii HB 2471 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.
Idaho Announcement Relating to 2025 Unemployment Tax Rates and Wage Base In 2025, employers in the best positive-rate class will be assigned a tax rate of 0.225% and those in the least positive-rate class will be assigned a tax rate of 0.750%. In 2025, employers in the least negative-rate class will continue to pay a rate of 1.351%, while those in the most deficit-rate class continue to pay at the rate of 5.4%. The standard rate is 1.0%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $55,300 paid to each employee, up from $53,500 in 2024
Illinois Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Experience rates for existing employers range from 0.75% to 7.85% for 2025 (from 0.85% to 8.65% in 2024). The standard new employer rate is 3.65% for 2025 (from 3.95% in 2024). The rates include the 0.55% building fund rate (unchanged from 2024) for 2025. The state experience factor decreased from 126% to 114%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $13,916 paid to each employee, up from $13,590 in 2024.
Indiana Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Schedule C remains 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 $9,500.
Indiana HB 1111 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%.
Iowa Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Iowa contribution rates will continue to be determined under Rate Table 8 in 2025 and will range from 0.0% to 7.0%. New employers will pay 1.0% and new construction employers will pay 7.0% in 2025.
Effective January 1, 2025, employers will pay unemployment taxes on the first $39,500 paid to each employee, up from $38,200 in 2024.
Kansas HB 2570
The law, in relation to unemployment taxes, provides for the following:
Kentucky Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The same unemployment tax rate schedule will continue to be used in 2025. Tax rate Schedule A has been in effect since 2019, with rates that range from 0.3% to 9.0%. The Service Capacity Upgrade Fund (SCUF) assessment rate of 0.075% remains in effect for 2025. This means 0.075% of an employer's tax rate is diverted to the SCUF assessment instead of their reserved account. The reduction for the SCUF assessment does not increase or decrease the total amount of unemployment tax owed to the state. An employer cannot claim the SCUF assessment on their federal unemployment tax filings.
Effective January 1, 2025, employers will pay unemployment taxes on the first $11,700 paid to each employee, up from $11,400 in 2024.
Kentucky Announcement Relating to Professional Employer Organizations Recent amendments to Kentucky's administrative regulations, specifically 787 KAR 1:010 and 787 KAR 1:370, introduce changes affecting Professional Employer Organizations (PEOs) that aim to streamline unemployment insurance reporting and enhance compliance with state labor laws. PEOs must now establish separate employer reserve accounts for each client. This change necessitates the use of a new form, UI-1P, specifically designed for PEOs to apply for these accounts. The form must be submitted electronically through the Unemployment Insurance Self-Service Web Portal at kewes.ky.gov. PEOs are required to maintain separate records and submit individual state unemployment insurance wage and premium reports for each client. The regulations mandate that PEOs promptly notify the Office of Unemployment Insurance about any additions or deletions of clients during the relevant reporting quarter. For newly established PEOs not previously subject to Ky. Rev. Stat. Ann. §336.248, a new employer premium rate will be assigned based on the reserve ratio of their industrial classification. The regulations clarify that a PEO is not considered a successor employer to any client with whom it has no common ownership, management, or control.
Louisiana Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The basic rate schedule remained the same with only positive balanced employers having a 10% rate reduction. For 2025, negative balanced employers do not receive the 10% rate reduction. The social charge rates increased as did most rates. The minimum and maximum rates remained the same at 0.09% to 6.20%. The taxable wage base will continue to be $7,700 in 2025.
Maine Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The 2025 employer unemployment tax schedule will remain at Schedule A, the lowest level under the law. Contribution rates in Maine for 2025 are adjusted by a 0.14% competitive skills scholarship fund (CSSF) rate and a 0.16% unemployment program administration fund (UPAF) rate that are now in effect. As adjusted, rates for 2025 range from 0.30% to 6.27%. New employers pay a combined total rate of 2.41% for 2025.
The taxable wage base will continue to be $12,000 for 2025.
Massachusetts Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The unemployment tax rate Schedule D is in effect. Tax rates for experience-rated employers range from 0.83% to 4.61% for positive-rated employers and from 6.19% to 12.65% for negative-rated employers for 2025. The new employer rates are 2.13% for non-construction industry employers and 5.45% for construction industry employers for 2025. Experience-rated employers are also subject to the COVID-19 Recovery Assessment. Based on the 2025 rate schedule, the assessment rates range from 0.210% to 1.166% for positive-rated employers and 1.566% to 3.200% for negative-rated employers. The Workforce Training Fund assessment remains 0.056% for 2025.
The taxable wage base remains $15,000. For 2025.
Massachusetts Trust Fund Outlook The Massachusetts Department of Unemployment Assistance released its October 2024 Annual Outlook Report for the Unemployment Insurance (UI) Trust Fund, projecting increasing employer contribution rates over the next several years. The report indicates that the UI tax schedule is projected to move from Schedule C in 2024 to Schedule D in 2025, and then to Schedule F in 2026-2027, before reaching Schedule G in 2028. These escalating schedules will result in higher unemployment tax rates for most employers, with the average contribution rate projected to rise from 2.14% in 2024 to 5.42% by 2028. The increases are deemed necessary to rebuild the trust fund balance, which is forecasted to decline from $1.91 billion at the end of 2024 to near depletion by the end of 2027, assuming current economic projections hold.
Michigan Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Unemployment rates for 2025 will remain unchanged from 2024. The range of rates for experience-rated employers will continue to run from 0.06% to 10.3%. The new employer rate for non-construction employers will remain 2.7%, while the rate for construction employers is expected to remain at 6.0%. The maximum rate for experience-rated employers will continue to include a 6.3% maximum chargeable benefit, a 3.0% maximum account building component, and a 1.0% maximum nonchargeable benefits component. The range for non-chargeable benefits components will continue to run from 0.06% to 1.0%. 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.
Effective January 1, 2025, employers will pay unemployment taxes on the first $9,000 paid to each employee ($9,500 for delinquent employers), down from $9,500 in 2024.
Minnesota Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The base rate increased from 0.1% to 0.4%, and the workforce enhancement fee of 0.1% remained the same. The state again included the 5% additional assessment resulting in an increase in unemployment tax for most employers. The Additional Assessment has come into play again for 2025 due to the level of the trust fund. The Additional Assessment is assessed on tax contributions, not taxable payroll. The rates range from 0.50% to 9.40% which includes the 0.1% workforce enhancement fee.
New employer tax rate: varies by industry 1.00% to 8.90% (also in 2024). Experienced employer tax rate range: 0.40% to 8.90% (0.10% to 8.90% in 2024). Additional assessment: 5.00%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $43,000 paid to each employee, up from $42,000 in 2024.
Missouri Announcement Relating to 2025 Unemployment Tax Rates and Wage Base For 2025, 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%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $9,500 paid to each employee, down from $10,000 in 2024.
Montana Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The rate schedule remained Schedule I. All the rates remained the same; however, the ratios changed that will cause varying effects. The Administrative Fund Tax Rate remained 0.18% for all employers, except the minimum rate, which remained 0.13%. Rates range from 0.13% to 6.30% with penalty rates up to 9.45%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $45,100 paid to each employee, up from $43,000 in 2024.
Nebraska Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Experienced employer tax rates range: 0.0% to 5.40% (minimum and maximum rate unchanged, with different intermediate rates in 2025). The State Unemployment Insurance Tax (SUIT) rate remained 5%, excluding the minimum and maximum rates. New employer tax rate: non-construction employers 1.25%, construction employers 5.4% (unchanged from 2024).
The taxable wage base will continue to be $9,000 for 2025 ($24,000 wage base for Tax Category 20 employers).
Nebraska LB 1393 Legislative Bill 1393 adds to the calculation of the state's reserve ratio to determine the yield factor used in figuring out an employer's unemployment tax rate. Also, beginning January 1, 2025, the final average combined unemployment tax rate will be reduced by 5% through December 31, 2029. The yield rate is divided by certain taxable wages to create the average combined tax rate.
Nevada Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The unemployment tax rates for experienced employers continue to range from 0.25% to 5.4% (consists of 18 rate classes). An experienced employer's unemployment tax rate is determined by a reserve ratio formula. Each year, DETR issues regulation changes in the reserve rate ratio. So, while the unemployment tax rates continue to range from 0.25% to 5.4% in 2025, an employer's tax rate may change based upon the new reserve ratio changes for the 18 rate classes. The Nevada regulation containing the schedule of contribution rates has been amended to update reserve ratios for each class for 2025. The range of reserve ratios is 18.00% or more for Class 1 and less than -7.60% for Class 16. In addition, employers (except those assigned the maximum 5.4% tax rate) pay a 0.05% career enhancement program tax.
Effective January 1, 2025, employers will pay unemployment taxes on the first $41,800 paid to each employee, up from $40,600 in 2024.
New Hampshire Announcement Relating to 2024/2025 Unemployment Tax Rates and Wage Base
The rate schedule remained the same as that for the second quarter of 2024 with rates ranging from 0.100% to 7.500%. The assigned rate is currently only effective for the third quarter of 2024. Positive balanced employers’ rates reflect a 1.0% fund balance reduction. Negative balanced employers’ rates do include an additional Inverse Rate Surcharge of 0.5%. The rate could change for the fourth quarter of 2024 and the first and second quarters of 2025. If the rate changes, no notification is sent so please refer to the rate indicated on your Employer’s Tax and Wage Report each quarter to ensure you are paying at the correct rate.
For the fourth quarter 2024 and first quarter 2025, the 1.0% reduction to the tax rate of positive-rated employers in good standing (Schedule I) remains unchanged. The 0.5% inverse minimum rate added to the tax rate of negative-rated employers (Schedules II and III) also remains the same for fourth quarter 2024 and first quarter 2025.
The taxable wage base remained $14,000 for calendar year 2025.
New Jersey (fiscal year jurisdiction) Announcement Relating to 2024/2025 Unemployment Tax Rates and Wage Base The New Jersey Department of Labor and Workforce Development announced that unemployment tax rates will be determined under Table D for the 2025 fiscal year that runs from July 1, 2024 to June 30, 2025 (higher Table E was in effect for the prior fiscal year). The unemployment tax rates in Table D range from 0.60% to 5.40% for positive reserve ratio employers; and from 5.60% to 6.40% for deficit reverse ratio employers. The new employer rate under Table D is 3.1%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $43,300 paid to each employee, up from $42,300 in 2024.
New Mexico Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases For 2025, the reserve factor is 3.5719 and rates range from 0.33% to 5.4%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $33,200 paid to each employee, up from $31,700 in 2024.
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 June of 2024, 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. The current year rate (2024) is .12%, a reduction from last year’s rate (2023) of .18%. The IAS for employers is calculated using the wages subject to contributions for the current payroll year (e.g., the fourth quarter of 2022 through the third quarter of 2023) and multiplying those wages by the IAS rate of .12%.
North Carolina Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases Base rate: 1.9%. Employer's reserve ratio percentage: Employer's reserve ratio multiplied by 0.68. Unemployment tax rate for beginning employers: 1.0%. Minimum unemployment tax rate: 0.06%. Maximum unemployment tax rate: 5.76%. Final date for voluntary unemployment contributions: January 15, 2025. Final date to protest unemployment tax rate: April 30, 2025.
Effective January 1, 2025, employers will pay unemployment taxes on the first $32,600 paid to each employee, up from $31,400 in 2024.
North Dakota Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases North Dakota’s 2025 contribution rates will range from 0.08% to 1.14% for positive-balance employers and from 6.09% to 9.69% for negative-balance employers. The new employer rate for positive-balance nonconstruction employers will be 1.03% and the new employer rate for negative-balance nonconstruction employers will be 6.09%. The new employer rate for both positive-balance and negative-balance construction employers will be 9.69%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $45,100 paid to each employee, up from $43,800 in 2024.
Ohio Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases Taxable wage base: $9,000 (unchanged from 2024). New employer tax rate: 2.7% for non-construction employers, 5.6% for construction employers (unchanged from 2024). Experienced employer tax rate range: 0.4% to 10.1% (unchanged from 2024).
Oklahoma Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases The OESC determines employer contribution rates based on the information provided in an employer's quarterly wage reports, along with the state's experience factor and conditional factor. In 2025, Conditional Factor D and a 50% State Experience Factor remain in effect. The range of contribution rates for employers with an experience rating also stay the same, continuing to range from 0.3% to 9.2%. For newly established employers, the rate will still be set at 1.5%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $28,200 paid to each employee, up from $27,000 in 2024.
Oregon Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases The Oregon 2025 SUI tax rates were issued on November 15, 2024. The rate schedule remained Schedule III, which will result in varying effects on rates as the ratios changed. With HB 3389, the state is no longer using the 2020 computation period as this ended with the 2024 rates. Therefore, the computation period has returned to the normal computation for 2025 rates of July 1, 2021 to June 30, 2024. Included in the above total rate is a special payroll tax offset assessed all but maximum rated employers. It is a 0.09% Supplemental Employment Department Administration Fund rate assessed for all four quarters (maximum rates are exempt). This does not increase the rate. It is just an offset. Since this is an odd numbered year, there is a 0.03% Wage Security Fund rate for the first quarter (maximum rates are exempt). The total of the two surcharges for the first quarter is 0.12%. This does not increase the rate. It is just offset. The rates range from 0.9% to 5.4%.
The taxable wage base increased to $54,300 for 2025 (from $52,800 for 2024).
Pennsylvania Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases Pennsylvania announced their rate schedule for 2025. Rates range from 1.1419% to 10.3734%. The State Adjustment Factor is 0.75% and the Interest Factor is 0.00%, which both remained the same as that of 2024, and the Additional Contributions Factor remained 0.60% and the Surcharge Adjustment multiplier remained 9.20%. The employee rate, which is not included in the above rate, remained 0.07%. If a delinquency exists on the account through the second quarter of 2024, 3% is added to the basic contribution rate. Newly liable non-construction employers face a rate of 3.8220%, while construction employers will see a 10.5924% rate.
The taxable wage base remains at $10,000.
Puerto Rico Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases The rate schedule decreased to Schedule E. The total rate may not match the actual tax 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 3.0% to 5.4%.
The taxable wage base remains at $7,000.
Rhode Island Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases Unemployment insurance tax rates will continue to be determined under Schedule G for experienced employers with rates ranging from 1.1% to 9.7%. New employers will pay 1.21%. Both types of employers are subject to a 0.21% reduction to offset the Job Development Assessment.
Effective January 1, 2025, employers will pay unemployment taxes on the first $29,800 paid to each employee ($31,300 for those employers with the highest UI tax rate), up from $29,200 in 2024.
South Carolina Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Experienced employer tax rate range: 0.06% to 5.46% (unchanged from 2024). As with 2024, there will continue to be no solvency tax surcharge imposed on employers in 2025. The taxable wage base will remain $14,000 for 2025.
South Dakota Announcement Relating to 2025 Unemployment Tax Rates and Wage Base South Dakota's unemployment tax structure for 2025 will remain largely unchanged from previous years. Experienced employers will continue to have their unemployment tax rates determined under Schedule C, with rates ranging from 0% to 8.8%. This rate includes an investment fee that varies from 0% to 0.53%, depending on the employer's reserve ratio. For experienced employers with a reserve ratio below 2.25%, an additional 0.02% administrative fee will be applied. New employers entering the non-construction sector will face a consistent rate structure, with a 1.2% rate for their first year of business, followed by a 1% rate for both their second and third years. The construction industry, however, maintains higher rates for new employers, with a 6.0% rate in the first year and a 3.0% rate for the second and third years. It's important to note that new employers who end their first year with a negative account balance may be subject to extended application of the initial rates of 1.2% for non-construction and 6.0% for construction businesses. All new employer rates incorporate a 0.55% investment fee.
The taxable wage base will remain $15,000 for 2025.
Tennessee (fiscal year jurisdiction) Announcement Relating to 2024/2025 Unemployment Tax Rates and Wage Bases Effective January 1, 2025 through June 30, 2025, the tax rates for experience-rated employers continue to range from 0.01% to 10.0% under Table 6. The new employer rate remains at 2.7%. For calendar year 2025, the taxable wage base will remain $7,000.
Effective July 1, 2024 through December 31, 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.
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.
Texas Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The unemployment tax rates range from 0.25% to 6.25% for experience-rated employers and include a 0.15% replenishment tax rate and a .010% employment and training investment assessment rate for 2025. The Replenishment Ratio decreased from 1.22 to 1.21. The tax rate for new employers remains 2.7% or the industry average (based on the North American Industry Classification System), whichever is higher, for 2025.
The taxable wage base remains at $9,000 for 2025.
Utah Announcement Relating to 2025 Unemployment Tax Rates and Wage Bases The minimum and maximum tax rates are 0.2% and 7.2%. A 1.0% delinquent tax rate may be added to the overall rate for employers that did not pay all contributions for the fiscal year ending June 30. In addition, the reserve factor is 1.10 and the social cost is fixed at 0.002 in 2025. The reserve factor is an adjustment to the benefit ratio used to maintain an adequate balance in the benefit reserve fund. The social cost applies to all employers to recover benefit costs that cannot be attributed to a specific employers.
The taxable wage base is $48,900 for 2025 (up from $47,000 for 2024).
Vermont (fiscal year jurisdiction) Announcement Relating to 2024/2025 Unemployment Tax Rates and 2025 Wage Base Effective July 1, 2024 to June 30, 2025, the Vermont contribution rate schedule for employers remains Schedule 1. Rates under Schedule 1 range from 0.4% for Rate Class 0 to 5.4% for Rate Class 20. New employers pay 1.0% for this period, while new out-of-state employers in certain industries pay as follows: 2.2% for employers involved in the construction of buildings; 3.9% for employers involved in heavy and civil engineering construction; and 2.8% for specialty trade contractors.
Effective January 1, 2025, employers will pay unemployment taxes on the first $14,800 paid to each employee, up from $14,300 in 2024.
Virgin Islands Announcement Relating to 2025 Wage Base The Virgin Islands has changed to a Payroll Variation method of calculating the assigned tax rate for 2025, which is indicated at 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 4.06% for 2025. 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 2.46% or a maximum rate not to exceed 5.40%. The 2025 tax rates will range from 2.46% for a TRIG of 1 to 5.40% for a TRIG of 14 with varying rates for a TRIG of 2 to 9. This change has resulted in the rates decreasing for most employers. An assigned 2025 tax rate of 4.06% 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.
Effective January 1, 2025, employers will pay unemployment taxes on the first $31,100 paid to each employee, up from $31,000 in 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.
Virginia Announcement Relating to 2025 Unemployment Tax Rates and Wage Base The unemployment base tax rate for experienced rated employers is calculated based on claim history and will range from 0.1% to 6.2%. During the pandemic, Virginia capped unemployment tax rates to limit the tax liability for employers during this period. For 2025, tax rates will return to the regular contribution schedule. Additionally, a state law passed in 2024 that lowers base tax rates and allocates an equal amount in the form of an administrative fee to be used for operational costs will be reflected separately on an employer's unemployment tax notice. New employers will pay a rate of 2.5%, in addition to any pool charge and fund-builder changes that may be required.
Washington Announcement Relating to 2025 Unemployment Tax Rates and Wage Base 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.
Effective January 1, 2025, employers will pay unemployment taxes on the first $72,800 paid to each employee, up from $68,500 in 2024.
Washington State SB 5061 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 HB 1901 The expanded access for employers to Washington State's voluntary unemployment insurance (UI) contributions was permanently extended. Voluntary UI contributions allow an employer to reduce its experience rating by reimbursing the UI trust fund for unemployment benefits paid to its former employees. An employer must meet certain criteria to participate in the program. In 2021, the state temporarily expanded access to the program by enacting temporary changes (see SB 5061 above). These changes were set to expire on May 31, 2026. House Bill 1901 makes the temporary expanded access to the program permanent. The now permanent changes include the March 31 submission date for the program (previously, February 15), increasing at least eight rate classes from the previous year (previously, 12 rate classes), and payments resulting in a reduction of two rate classes (previously, four rate classes). In addition, no surcharge will be applied to any voluntary payments (previously, there was a 10% surcharge).
West Virginia Announcement Relating to 2025 Unemployment Tax Rates and Wage Base 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 for 2025. Rates range from 1.50% to 8.50%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $9,500 paid to each employee, down from $9,521 in 2024.
Wisconsin Announcement Relating to 2025 Unemployment Tax Rates and Wage Base Unemployment tax rates will continue to be determined under Schedule D in 2025, the lowest schedule allowed by law, with rates ranging from 0.00% to 12.00% for employers with payroll under $500,000 and from 0.05% to 12.00% for employers with payroll of $500,000 or more, surcharges included. The surcharges will remain in effect through the end of calendar year 2025. New non-construction employers tax rate: Payrolls under $500,000 will continue to pay 3.05%. Payrolls of $500,000 or more (other than new construction employers) will continue to pay 3.25%. New construction employers tax rate: Payrolls under $500,000 remain at 2.90%. Payrolls over $500,000 remain at 3.10%.
The taxable wage base remained unchanged at $14,000.
Wyoming Announcement Relating to 2025 Wage Base The total of all four constant factors used in the rate computation increased to 1.50% for most employers and increased from 0.0% to 0.14% for 2025 for employers with zero benefit charges, resulting in higher rates. Rates range from 0.14% to 10.00%.
Effective January 1, 2025, employers will pay unemployment taxes on the first $32,400 paid to each employee, up from $30,900 in 2024.
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 average SUI tax rates, average rates increased by 9.9% in 2021, then decreased by 7.9% in 2022, then decreased another 4.6% in 2023, then increased by 22.3% in 2024 (per preliminary estimate provided by the U.S. DOL). This demonstrates the variable nature of SUI tax rates during the recent post-COVID period.. Although the estimated increase in average SUI tax rates from 2023 to 2024 appear significant, rates remain relatively low.
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:
Even after rates have been calculated and assigned, there are actions that employers can take to help reduce 2025 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 (log-in may be required). The site includes a 2025 Tax Guide intended to assist employers in identifying potential risks associated with increases in SUI tax costs from 2024 to 2025 (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.
____________________________________________________________________ Footnotes:
1. Per the FUTA Credit Reduction site published by the United States Department of Labor (“DOL”) Employment & Training Administration. 2. 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). 3. Per U.S. DOL, SUI Trust Fund Solvency Report for 2024 (issued March 2024). 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). 4. 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. 5. Information obtained from sources considered to be reliable (e.g., state legislative changes, state workforce agency announcements, state surveys, etc.). 6. Per Average Employer Contribution Rates by State issued by the U.S. Department of Labor. Net Trust Fund Balances per respective Unemployment Insurance Data Summary reports published by the U.S. Department of Labor and FiscalData and TreasuryDirect.
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