State unemployment tax

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• Unemployment insurance in the states
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How is the joint federal-state unemployment insurance program funded? Federal and state unemployment taxes fund the joint federal-state unemployment insurance program. Federal unemployment tax revenues fund accounts in the federal Unemployment Trust Fund (UTF) that pay for federal and state unemployment insurance program administration costs, the federal portion of extended benefits, and loans to State Unemployment Trust Funds. State unemployment tax revenues fund State Unemployment Trust Funds, which pay regular benefits and the state portion of extended benefits. Read more about unemployment taxes here.

Unemployment insurance
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State unemployment tax is a term that refers to the state employment taxes employers must pay to support the unemployment insurance program. State unemployment taxes are also known as SUTA taxes, state unemployment insurance (SUI) taxes, or reemployment taxes. Each state sets its own tax rate range, wage base (the amount of pay an employer needs to pay taxes on for each employee), and experience rating system.

Employers also pay federal unemployment taxes under the Federal Unemployment Tax Act (FUTA).

Background

State unemployment tax revenues are transferred to the appropriate State Unemployment Trust Fund account in the federal Unemployment Trust Fund. Each state uses the money in its fund to pay regular unemployment benefits and its share of extended benefits.

New employers begin paying into the unemployment insurance system at the new employer rate. Depending on state laws, employers that have paid unemployment insurance taxes for a set time period (usually a few years) receive an experience rating. The more unemployment claims an employer has, the higher their tax rate.

Alaska, New Jersey, and Pennsylvania also require employees to contribute to unemployment taxes.

What is my state unemployment tax rate? | Unemployment tax rates by state

SUTA tax amounts vary by state. The following list provides a summary of the range of SUTA tax amounts across states in 2023:

• Regular rates ranged from 0% for employers with the lowest experience rating in six states up to 18.78% of each employee's base wage in Arizona for employers with the highest experience ratings.
• The new employer rate ranged from 0.45% in South Carolina to 4.0% in Hawaii.
• California, Florida, and Tennessee had the lowest wage bases at $7,000. Washington had the highest wage base at $67,600.

The table below outlines new employer SUTA tax rates, regular rate ranges for experienced employers, and wage bases for all 50 states as of 2023.

State unemployment tax rates
State	SUTA new employer tax rate	Employer tax rate range	SUTA wage bases
Alabama	2.70%	0.65% – 6.8% (including employment security assessment of 0.06%)	$8,000
Alaska	Standard rate 2.37% (0.51% employee share)	1.51% – 5.91%	$46,800
Arizona	2.00%	0.07% – 18.78%	$8,000
Arkansas	3.10%	0.1% – 14% (including solvency surtax)	$10,000
California	3.40%	1.5% – 6.2% (+ emergency 15% surcharge)	$7,000
Colorado	1.70%	0.75% – 10.39%	$20,400
Connecticut	2.8%	1.7% – 6.6%	$15,000
Delaware	1.80%	0.1% - 5%	$14,500
Florida	2.70%	0.1% – 5.4%	$7,000
Georgia	2.70%	0.04% – 7.56%	$9,500
Hawaii	4.0%	1.2% - 6.2%	$55,800
Idaho	1.071% (including the workforce rate tax of 0.03%)	0.207% – 5.4%	$50,000
Illinois	3.95%	0.03% – 8.1% (plus fund building of 0.55%)	$12,960
Indiana	2.50%	0.5% – 7.4%	$9,500
Iowa	1.00%	0.0% – 7%	$36,100
Kansas	2.70%	0.17% – 6.4%	$14,000
Kentucky	2.70%	0.3% – 9.0%	$10,800
Louisiana	Varies	0.09% – 6.2%	$7,700
Maine	2.19%	0.22% – 5.69%	$12,000
Maryland	2.3%	1.0% – 10.5%	$8,500
Massachusetts	1.43%	0.56% – 8.62%	$15,000
Michigan	2.70%	0.6% – 10.3%	$9,500
Minnesota	Varies	Maximum of 8.9% (with a base tax rate of 0.10%)	$41,000
Mississippi	1.0% (1st year), 1.1% (2nd year), 1.2% (3rd year)	0.0% – 5.4%	$14,000
Missouri	2.7%	0.0% – 6.0% (does not include maximum rate surcharge or contribution rate adjustment)	$10,500
Montana	Varies	0.13% – 6.3% (includes AFT rate of 0.13% - 0.18%)	$40,900
Nebraska	1.25%	0% – 5.4%	$9,000; $24,000
Nevada	2.95%	0.25% – 5.4%	$40,100
New Hampshire	2.7%	0.1% – 7.0%	$14,000
New Jersey	3.1% (including Workforce Development and Supplemental Workforce Funds); Employee rate of 0.425% (including the Workforce Development and Supplemental Workforce Funds)	0.6% – 6.4% (employee rate of 0.425%)	$41,100
New Mexico	1.0% or the industry average rate, whichever is greater	0.33% – 5.4%	$30,400
New York	3.13%	0.6% – 7.9% (including RSF tax of 0.75%)	$12,300
North Carolina	1.00%	0.06% – 5.76%	$30,000
North Dakota	1.13% (positive balance); 6.29% (negative balance)	0.08% – 9.97%	$38,400
Ohio	2.70%	0.3% – 9.8%	$9,000
Oklahoma	1.50%	0.3% – 9.2%	$25,700
Oregon	2.1%	0.7% – 5.4%	$51,600
Pennsylvania	3.822%	1.419% – 10.3734%	$10,000
Rhode Island	1.09% (including the 0.21% Job Development Assessment)	1.1% – 9.7%	$24,600; $26,100
South Carolina	0.45% (including the 0.06% contingency surcharge)	0.06% – 5.46% (including the 0.06% contingency surcharge)	$14,000
South Dakota	1.20% (+ 0.55% investment fee)	0% – 9.5%	$15,000
Tennessee	2.70%	0.01% – 10%	$7,000
Texas	2.7% (or the industry average rate, whichever is greater)	0.23% – 6.23%	$9,000
Utah	Varies	0.3% – 7.3%	$44,300
Vermont	1.0% (for most employers)	0.4% – 8.4%	$13,500
Virginia	2.50% (plus add-ons)	0.1% – 6.2%	$8,000
Washington	Varies	1.25% – 8.15%	$67,600
West Virginia	2.7% (for most employers)	Not available	$9,000
Wisconsin	3.05% for new employers with payroll < $500,000; 3.25% for new employers with payroll > $500,000	0% – 12%	$14,000
Wyoming	Varies	0.48% – 9.78%	$29,100

Penalties for nonpayment

Businesses that falsely classify employees as independent contractors, neglect to report wages, or set up fictitious employer accounts to avoid unemployment tax liabilities have committed unemployment insurance fraud.

State laws governing unemployment insurance may classify unemployment insurance fraud as either a misdemeanor or felony offense, depending on the extent of the fraud. Federal guidelines require states to assess a minimum penalty of 15% of the amount of the fraudulent claim, according to the U.S. Department of Labor. States generally prohibit individuals found guilty of committing unemployment insurance fraud from receiving future benefits for a minimum of six weeks for every week of fraudulent claims.

Criminal prosecution under unemployment insurance laws may result in the following penalties, depending on the state:

• Fines up to or exceeding $10,000, depending on the state.
• Incarceration.
• Probation in addition to, or in lieu of, incarceration.
• Repayment of fraudulent benefits.
• Forfeiture of future income tax refunds.
• Permanent loss of eligibility for unemployment insurance benefits.

See also

• Unemployment insurance
• Unemployment insurance fraud
• Unemployment insurance fraud recovery
• Unemployment taxes
• Unemployment Trust Fund
• Unemployment filings during the coronavirus (COVID-19) pandemic, 2020-2021
• State government plans to end federal unemployment benefits related to the coronavirus (COVID-19) pandemic, 2021

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