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Unemployment tax wage base
| Unemployment insurance |
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Unemployment tax wage base is a term that refers to the amount of wages per employee on which an employer is taxed in order to fund the joint federal-state unemployment insurance program.
Employers do not pay unemployment taxes on employee earnings above the wage base.
The wage bases for state unemployment (SUTA) taxes vary by state. Federal unemployment (FUTA) taxes had a wage base of $7,000 as of April 2023.
Federal unemployment tax wage base
- See also: Federal Unemployment Tax
While state tax amounts vary, the Federal Unemployment Tax Act (FUTA) tax is 6% of the federal unemployment tax wage base—the first $7,000 of an employee's wages—as of April 2025. Employers can receive an offset of up to 5.4% of their FUTA tax when they pay state unemployment taxes on time. An employer that receives the full 5.4% FUTA credit, therefore, pays 0.6% of the first $7,000 of an employee's wages, or $42, in FUTA tax per qualifying employee.[1][2]
FUTA tax credits are reduced for employers in states that have outstanding federal unemployment loans from the Unemployment Trust Fund’s Federal Unemployment Account on January 1 for at least two consecutive years. If states do not pay federal unemployment loans back by November 10 of the second consecutive year, FUTA tax credits are reduced by 0.3%. The reduction would limit the maximum FUTA tax credit to 5.1%, and employers would pay at least $63 in FUTA taxes per employee making $7,000 or more.[3]
State unemployment tax wage bases
- See also: State unemployment tax
Wage bases for SUTA taxes vary by state. The following bulleted list describes selected wage base highlights for the year 2025:[4][5]
- Oregon had the lowest wage base at $1,500.
- Washington had the highest wage base at $72,800.
- The average unemployment tax wage base was $21,547.
The table below outlines regular SUTA tax rate ranges for experienced employers and wage bases and new employer SUTA tax rates for all 50 states as of January 2025.
| State unemployment tax rates | |||
|---|---|---|---|
| State | SUTA new employer tax rate | Employer tax rate range[6] | SUTA wage bases |
| Alabama | 2.7% | 0.20% – 6.80% | $8,000 |
| Alaska | 1.0% | 1.00% – 5.40% | $51,700 |
| Arizona | 2.0% | 0.04% – 9.72% | $8,000 |
| Arkansas | 2.0% | 0.1% – 5.0% | $7,000 |
| California | 3.4% | 1.5% – 6.2% | $7,000 |
| Colorado | 3.05% | 0.64% – 12.34% | $27,200 |
| Connecticut | 2.2% | 0.1% – 10.0% | $26,100 |
| Delaware | 1.0% | 0.3% – 5.4% | $12,500 |
| D.C. | 2.7% or prior year average | 1.00% – 7.40% | $9,000 |
| Florida | 2.7% | 0.1% – 5.4% | $7,000 |
| Georgia | 2.7% | 0.06% – 8.1% | $9,500 |
| Hawaii | 2.4% | 2.4% – 5.6% | $62,000 |
| Idaho | 1.0% | 0.23% – 5.4% | $55,300 |
| Illinois | 3.65% | 0.75% – 7.85% | $13,916 |
| Indiana | 2.5% | 0.5% – 11.2% | $9,500 |
| Iowa | 1.0% | 0.0% – 7.0% | $39,500 |
| Kansas | 1.75% | 0.0% – 6.65% | $14,000 |
| Kentucky | 2.7% | 0.3% – 9.0% | $11,700 |
| Louisiana | Varies | 0.09% – 6.2% | $7,700 |
| Maine | 2.41% | 0.3% – 6.27% | $12,000 |
| Maryland | 2.6% | 0.3% – 7.5% | $8,500 |
| Massachusetts | 2.13% | 0.83% – 12.65% | $15,000 |
| Michigan | 2.7% | 0.06% – 10.3% | $9,000 |
| Minnesota | Varies | 0.4% – 8.9% | $43,000 |
| Mississippi | 1.0% | 0.0% – 5.4% | $14,000 |
| Missouri | 1.0% (nonprofits) 2.376% (others) | 0.0% – 6.0% | $9,500 |
| Montana | Varies | 0.00% – 6.12% | $45,100 |
| Nebraska | 1.25% | 0.0% – 5.4% | $9,000 ($24,000 for max rate) |
| Nevada | 2.95% | 0.25% – 5.4% | $41,800 |
| New Hampshire | 2.7% | 1.00% – 7.00% | $14,000 |
| New Jersey | 3.1% | 0.6% – 6.4% | $43,300 |
| New Mexico | 1.0% | 0.33% – 5.4% | $33,200 |
| New York | 4.1% | 0.0% – 8.9% | $12,800 |
| North Carolina | 1.0% | 0.06% – 5.76% | $32,600 |
| North Dakota | 1.03% (positive) 6.09% (negative) | 0.08% – 9.69% | $45,100 |
| Ohio | 2.7% | 0.5% – 10.2% | $9,000 |
| Oklahoma | 1.5% | 0.3% – 9.2% | $28,200 |
| Oregon | 2.4% | 0.9% – 5.4% | $54,300 |
| Pennsylvania | 3.822% | 1.42% – 10.37% | $10,000 |
| Rhode Island | 1.21% | 1.1% – 9.7% | $29,800 ($31,300 for negative balance) |
| South Carolina | 0.35% or 1% | 0.06% – 5.46% | $14,000 |
| South Dakota | 1.2% | 0.0% – 8.8% | $15,000 |
| Tennessee | Varies | 0.01% – 10.0% | $7,000 |
| Texas | 2.7% | 0.25% – 6.25% | $9,000 |
| Utah | Varies | 0.2% – 7.2% | $48,900 |
| Vermont | 1.0% | 0.4% – 5.4% | $14,800 |
| Virginia | 2.5% | 0.1% – 6.2% | $8,000 |
| Washington | Varies | 0.27% – 8.15% | $72,800 |
| West Virginia | 2.7% | 1.5% – 8.5% | $9,500 |
| Wisconsin | 3.05% (<$500k payroll) 3.25% (>$500k payroll) | 0.0% – 12.0% | $14,000 |
| Wyoming | Varies | 0.0% – 8.5% | $32,400 |
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
External links
Footnotes
- ↑ Brookings, "How does unemployment insurance work? And how is it changing during the coronavirus pandemic?" July 20, 2020
- ↑ Employment Law Firms, "How Unemployment Works," accessed May 18, 2021
- ↑ Internal Revenue Service, "FUTA Credit Reduction," accessed August 4, 2022
- ↑ Patriot, "What Is My State Unemployment Tax Rate?" accessed April 10, 2025
- ↑ APS Payroll, "SUTA WAGE BASES," accessed July 8, 2021
- ↑ Dependent on employer's experience rating.
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