Hire your first W-2 tech and the state sends you an unemployment tax rate you didn’t pick, on a wage base you’ve never heard of. The two numbers together decide what that hire costs: in Florida or Tennessee, 2.7% on the first $7,000 is $189 a year. In Washington, roughly 3.5% on $78,200 is about $2,100 before paid leave. And if your shop is classified as construction (which is where the NAICS system puts HVAC, plumbing, electrical and most installation trades), North Dakota charges 9.67% on $46,600, Pennsylvania 10.59% on $10,000, Kentucky 9% on $12,000, and Iowa, Kansas, Nebraska, Ohio and South Dakota all charge construction new employers two to five times the general rate.
This guide gives every state’s 2026 taxable wage base, new-employer rate, construction new-employer rate where one exists, experience-rate range, and what the first year costs on a $60,000 technician, as of October 2026. It also covers the federal layer (FUTA and California’s credit reduction), how long you stay at the new rate, and the three things a new shop does in year one that decide whether its rate goes down or up when experience rating kicks in.
Quick answer: State UI tax is the new-employer rate times the taxable wage base, per employee, per year. Wage bases for 2026 run from $7,000 (AR, CA, FL, LA, TN) to $78,200 (WA); 18 states are at $25,000 or more, 18 under $10,000. Standard new-employer rates run from 1.0% (AK, DE, ID, IA, MS, NC, ND, VT) to 4.1% (NY). Sixteen states assign construction new employers a higher rate, led by Pennsylvania (10.59%), North Dakota (9.67%), Kentucky (9.0%) and Minnesota (8.9%). The cheapest first tech is in Florida or Tennessee ($189); the most expensive is a construction hire in North Dakota ($4,506) or Minnesota (about $4,100). Add $42 FUTA everywhere ($147 or more in California, which still owes the federal government). New rates last two to four years, then your own layoffs set the rate.
On this page
How the Tax Works
State unemployment insurance (SUI, SUTA, or “reemployment tax” in Florida) is an employer-paid payroll tax that funds unemployment benefits. Three pieces:
- Taxable wage base: the amount of each employee’s annual wages the tax applies to. Once a tech passes the base for the year, you stop paying on him until January. A $7,000 base means the tax is done by mid-February for a full-time tech; a $78,200 base means it runs most of the year.
- New-employer rate: the flat rate every new account gets until it has enough history (two to four years, depending on the state) to be experience-rated. Most states set one rate for everyone; 16 set a higher one for construction, usually the industry’s average rate or the schedule maximum, on the theory that construction lays people off seasonally.
- Experience rate: after the new period, your rate is set by the benefits charged to your account relative to your taxable payroll (reserve-ratio or benefit-ratio method). A shop that never lays anyone off drifts toward the minimum (0% in several states); one that lays off every winter drifts toward the maximum (5.4% to 14.37%).
Three states also take a share from the employee (Alaska 0.5%, New Jersey 0.425%, Pennsylvania 0.07%), and a growing number run paid family leave, disability or other payroll programs through the same account, which is why the rate notice from New Jersey, Massachusetts, Oregon, Washington or Minnesota has four lines on it.
FUTA and the California Credit Reduction
The federal unemployment tax (FUTA) is 6.0% on the first $7,000 of each employee’s wages, reduced by a 5.4% credit for paying state UI on time, so the net is 0.6%, or $42 per employee per year, deposited quarterly once the liability passes $500 and reported on Form 940 by January 31. The credit shrinks by 0.3% for each year a state has carried a federal trust-fund loan past two Januaries. For 2025 (paid with the January 2026 Form 940) California’s credit reduction was 1.2%, making FUTA $126 per employee there; New York and Connecticut repaid in 2025 and dropped off. For 2026, California is headed to at least 1.5% ($147) unless it repays by November 10, 2026, with a possible benefit-cost add-on that could push the total much higher. The Virgin Islands are the only other reduction jurisdiction.
All 51 Jurisdictions: Base, Rate, Year-One Cost
Year-one cost is the standard new-employer rate times the lesser of the base and $60,000, which is what a full-time technician earning $60,000 costs in state UI before any construction surcharge, assessment or paid-leave program. Red chips in the state blocks below mark bases of $25,000 or more, amber $10,000–$24,999, grey under $10,000.
| State | 2026 wage base | New employer rate | Construction new rate | Yr-1 UI per $60K tech |
|---|---|---|---|---|
| Alabama | $8,000 | 2.70% | — | $216 |
| Alaska | $54,200 | 1.00% + 0.50% employee | — | $542 |
| Arizona | $8,000 | 2.00% | — | $160 |
| Arkansas | $7,000 | 2.00% + 0.20% | — | $154 |
| California | $7,000 | 3.40% + 0.10% ETT | — | $245 |
| Colorado | $30,600 | 3.05% combined | Industry-based for construction NAICS | $933 |
| Connecticut | $27,000 | 1.90% | — | $513 |
| Delaware | $14,500 | 1.00% | 1.00% | $145 |
| District of Columbia | $9,000 | 2.70% + 0.20% | — | $261 |
| Florida | $7,000 | 2.70% | — | $189 |
| Georgia | $9,500 | 2.70% | — | $257 |
| Hawaii | $64,500 | 2.40% | — | $1,548 |
| Idaho | $58,300 | 1.00% | — | $583 |
| Illinois | $14,250 | 3.350% | Construction new employers pay the standard 3.350% in 2026 | $477 |
| Indiana | $9,500 | 2.50% | 2.50%, or lesser of 4.0% and construction industry average | $238 |
| Iowa | $20,400 | 1.00% | 5.400% | $204 |
| Kansas | $15,100 | 1.75% | 5.55% for construction | $264 |
| Kentucky | $12,000 | 2.70% | 9.00% | $324 |
| Louisiana | $7,000 | Industry average | Construction industry average | $189–$245 |
| Maine | $12,000 | 2.54% combined | — | $305 |
| Maryland | $8,500 | 2.60% | — | $221 |
| Massachusetts | $15,000 | 2.42% | 6.08% for construction | $363 |
| Michigan | $9,000 | 2.70% | Construction industry average | $243 |
| Minnesota | $44,000 | Industry-based 1.0%–8.9% + 0.4% | 8.90% + 0.40% base for most construction NAICS | $616–$4,092 |
| Mississippi | $14,000 | 1.00% (yr 1) | — | $140 |
| Missouri | $9,000 | 2.376% | 2.376% | $214 |
| Montana | $47,300 | Industry-based 1.0%–2.0% | About 2.0% for construction | $473–$946 |
| Nebraska | $9,000 | 1.25% | 5.40% for construction | $113 |
| Nevada | $43,700 | 2.95% + 0.05% | — | $1,311 |
| New Hampshire | $14,000 | 1.70% (adjusted quarterly) | — | $238 |
| New Jersey | $44,800 | 2.80% + 0.50% disability | — | $1,254 |
| New Mexico | $34,800 | Greater of 1.0% or industry avg. | Construction industry average | $348–$700 |
| New York | $17,600 | 4.10% | — | $722 |
| North Carolina | $34,200 | 1.00% | — | $342 |
| North Dakota | $46,600 | 1.00% | 9.67% | $466 |
| Ohio | $9,000 | 2.85% | 5.85% | $257 |
| Oklahoma | $25,000 | 1.50% | — | $375 |
| Oregon | $56,700 | 2.40% | None | $1,361 |
| Pennsylvania | $10,000 | 3.822% | 10.5924% for construction | $382 |
| Rhode Island | $30,800 | 1.21% | — | $373 |
| South Carolina | $14,000 | 1.06% | — | $148 |
| South Dakota | $15,000 | 1.20% + 0.63% fees | 6.00% year one, 3.00% years two and three | $275 |
| Tennessee | $7,000 | 2.70% | — | $189 |
| Texas | $9,000 | Greater of 2.7% or industry avg. | Greater of 2.7% or construction industry average | $243–$450 |
| Utah | $50,700 | Industry-based (~1.2%–2.5%) | Construction industry average | $608–$1,268 |
| Vermont | $15,400 | 1.00% (from July 2026) | Foreign construction: 1.9% / 4.0% / 2.7% by NAICS | $154 |
| Virginia | $8,000 | 2.50% + add-ons | — | $200 |
| Washington | $78,200 | 115% of industry avg. (min 1.0%) | 115% of construction industry average | $782–$2,700 |
| West Virginia | $9,500 | 2.70% | 7.50% for foreign construction corporations | $257 |
| Wisconsin | $14,000 | 3.05% / 3.25% | 2.50% | $427 |
| Wyoming | $33,800 | Industry-based (~1.69% avg.) | Construction industry base rate | $571–$1,352 |
The 16 States That Charge Construction More
Whether you pay these rates depends on the NAICS code the state assigns at registration. NAICS 238 (specialty trade contractors) covers HVAC, plumbing, electrical, roofing, drywall, painting, flooring, concrete and most installation and repair work on buildings; 236 is building construction, 237 heavy and civil. Locksmiths (561622), appliance repair (811412), cleaning (561720), pest control (561710) and landscaping (561730) are not construction and pay the general rate. If the state assigned you 238 and your work is mostly service calls rather than installation, the classification can sometimes be challenged, but most states follow the NAICS code on your registration.
| State | Construction new-employer rate | Base | Yr-1 per $60K tech |
|---|---|---|---|
| North Dakota | 9.67% (maximum) | $46,600 | $4,506 |
| Minnesota | 8.90% + 0.40% | $44,000 | $4,092 |
| Pennsylvania | 10.5924% | $10,000 | $1,059 |
| Kentucky | 9.00% (Schedule A max) | $12,000 | $1,080 |
| Nebraska | 5.40% | $24,000 (category 20) | $1,296 |
| Iowa | 5.40% | $20,400 | $1,102 |
| Kansas | 5.55% | $15,100 | $838 |
| South Dakota | 6.00% yr 1 (+0.63% fees) | $15,000 | $995 |
| Massachusetts | 6.08% | $15,000 | $912 |
| Ohio | 5.85% | $9,000 | $527 |
| Michigan | ~5.0% (construction average) | $9,000 | $450 |
| Colorado | Industry-based; heavy construction 6.285% | $30,600 | $1,923 (heavy) |
| West Virginia | 7.50% (out-of-state corps only) | $9,500 | $713 |
| Vermont | 1.9% / 4.0% / 2.7% (out-of-state only) | $15,400 | $293–$616 |
| Texas | Greater of 2.7% or construction average | $9,000 | $243–$450 |
| Washington | 115% of construction average | $78,200 | $1,500–$2,700 |
Getting Off the New-Employer Rate
The new rate lasts two years (Arizona, Michigan), roughly three (most states: Alabama, California, Florida’s 10 quarters, Georgia, Kentucky, Tennessee, Texas’s four chargeable quarters, West Virginia’s 36 months), or four (Indiana, Nevada’s 14–17 quarters). After that, three things set your rate:
- Benefit charges. Every former employee who collects benefits charges your account for his share of them. Laying off a tech for the slow season and rehiring him in spring is the single most expensive thing a trades shop does to its UI rate; two or three such claims can move a small shop from 1% to 5% for years. Reduced hours, furlough-free scheduling, and the flat-rate pay structures covered in overtime laws by state exist partly to avoid it.
- Protesting claims you shouldn’t pay. A tech who quit, was fired for misconduct (including a positive drug test under a written policy, see drug testing laws by state), or refused suitable work generally isn’t eligible, but the state will charge your account unless you respond to the claim notice, usually within 10 days, with documentation. The SIDES electronic response system covers most states.
- Voluntary contributions and joint accounts. About half the states let an employer buy down its rate by making a voluntary contribution before the deadline (usually 30 days after the rate notice); it pays off when a small contribution moves you a bracket. Successor rules let a buyer inherit a seller’s good rate (and bad one), and SUTA dumping (shifting payroll to a new entity to get the new rate) is a federal and state crime.
What Changed for 2026
New for 2026: New York’s base jumped from $12,800 to $17,600 (2025 budget) and the state repaid its federal loan, ending its FUTA credit reduction. Iowa cut its base from $39,500 to $20,400 (SF 607). Oklahoma’s base fell from $28,200 to $25,000 (and to $24,400 in 2027); Louisiana’s from $7,700 to $7,000; Missouri’s from $9,500 to $9,000. Indexed increases hit Alaska, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Kansas, Kentucky, Minnesota, Montana, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, Utah, Vermont, Washington and Wyoming. Kentucky suspended its SCUF surcharge for 2026; Minnesota added a 14% assessment and launched Paid Leave; Vermont’s new-employer rate falls to 1.0% on July 1, 2026; West Virginia cut rates 7% on July 1, 2026; Illinois eliminated its separate construction new-employer rate; Colorado’s solvency surcharge continues. California’s FUTA credit reduction continues for a fifth year.
State-by-State Breakdown
Each block gives the 2026 wage base, the new-employer rate (with the construction rate where the state assigns one), the experience-rate range, the first-year cost on a $60,000 technician, and a note on what’s unusual about the state, with a link to the agency’s employer tax page.
Jump to your state
Alabama Low Wage Base: $8,000
Agency: Alabama Dept. of Labor
2026 taxable wage base: $8,000 per employee. Experience rate range: 0.20%–6.80%.
New employer rate: 2.70% (includes 0.06% employment security assessment).
Year-one state UI on a $60,000 tech: $216 at the new-employer rate (plus $42 FUTA).
Note: Rate stays until the account has two full years of experience. Alabama also levies a quarterly employment security assessment that varies with the trust fund.
Alaska High Wage Base: $54,200
Agency: Alaska Dept. of Labor, Employment Security Tax
2026 taxable wage base: $54,200 per employee. Experience rate range: 1.00%–5.40%.
New employer rate: 1.00% employer (industry average, roughly 1.0%–1.5% by NAICS) plus a 0.50% employee contribution withheld from wages.
Year-one state UI on a $60,000 tech: $542 at the new-employer rate (plus $42 FUTA).
Note: One of three states (with New Jersey and Pennsylvania) that makes the tech pay part of the tax; the employee share is withheld and remitted by the employer. Base indexed annually.
Arizona Low Wage Base: $8,000
Agency: Arizona DES
2026 taxable wage base: $8,000 per employee. Experience rate range: 0.03%–8.36%.
New employer rate: 2.00% for at least the first two calendar years.
Year-one state UI on a $60,000 tech: $160 at the new-employer rate (plus $42 FUTA).
Note: Low base and low new rate make Arizona one of the cheapest states to add a tech. Rates move to experience after two years.
Arkansas Low Wage Base: $7,000
Agency: Arkansas Division of Workforce Services
2026 taxable wage base: $7,000 per employee. Experience rate range: 0.20%–5.10%.
New employer rate: 2.00% plus 0.20% stabilization tax (effectively 2.20% on the first $7,000).
Year-one state UI on a $60,000 tech: $154 at the new-employer rate (plus $42 FUTA).
Note: Act 196 (2023) holds the base at $7,000 while the trust fund exceeds $600 million. New rate applies for three years.
California Low Wage Base: $7,000
Agency: California EDD
2026 taxable wage base: $7,000 per employee. Experience rate range: 1.50%–6.20% (plus 15% surcharge on Schedule F+).
New employer rate: 3.40% UI for the first two to three years, plus 0.10% Employment Training Tax; SDI (1.3% in 2026) is withheld from the employee on all wages.
Year-one state UI on a $60,000 tech: $245 at the new-employer rate (plus $42 FUTA).
Note: California has carried a federal UI loan since 2020, so employers also pay a FUTA credit reduction: 1.2% for 2025 ($126 per employee instead of $42), heading to at least 1.5% for 2026 ($147) unless the state repays by November 10, 2026. That federal add-on costs a California shop more than the state UI tax on a $7,000 base. See California employment laws for trade employers.
Colorado High Wage Base: $30,600
Agency: Colorado Dept. of Labor and Employment
2026 taxable wage base: $30,600 per employee. Experience rate range: 0.56%–7.34% plus surcharges.
New employer rate: 3.05% combined (1.53% base + 0.17% support surcharge + 1.35% solvency surcharge); new employers in construction NAICS codes are assigned industry-based rates, with heavy construction at 6.285% combined.
Construction new employers: Industry-based for construction NAICS; heavy/civil construction 6.285% combined.
Year-one state UI on a $60,000 tech: $933 at the new-employer rate (plus $42 FUTA).
Note: Colorado’s base climbs by statute to $32,100 in 2027. The 2026 solvency surcharge applies to everyone while the trust fund rebuilds; the premium-rate notice breaks out each piece.
Connecticut High Wage Base: $27,000
Agency: Connecticut Dept. of Labor
2026 taxable wage base: $27,000 per employee. Experience rate range: 1.10%–9.90% (2026 rates divided by 1.125 under the 2021 reform).
New employer rate: 1.90% (new employer rate is set at the greater of 1.0% or the state’s five-year benefit cost rate).
Year-one state UI on a $60,000 tech: $513 at the new-employer rate (plus $42 FUTA).
Note: The 2021 reform indexed the base ($26,100 in 2025, $27,000 in 2026) and phased down charged rates; Connecticut repaid its federal loan in 2025, so no FUTA credit reduction applies.
Delaware Mid Wage Base: $14,500
Agency: Delaware Dept. of Labor
2026 taxable wage base: $14,500 per employee. Experience rate range: 0.30%–5.40%; 6.30% delinquent.
New employer rate: 1.00% for new employers in all industries, including construction.
Construction new employers: 1.00% (same as general).
Year-one state UI on a $60,000 tech: $145 at the new-employer rate (plus $42 FUTA).
Note: Base jumped from $12,500 to $14,500 in 2026 under the 2024 indexing law. Delaware is one of the few states that doesn’t penalize construction new employers.
District of Columbia Low Wage Base: $9,000
Agency: DC Dept. of Employment Services
2026 taxable wage base: $9,000 per employee. Experience rate range: 1.90%–7.40% plus 0.20%.
New employer rate: 2.70% (the greater of 2.7% or the prior-year average employer rate), plus 0.20% administrative funding assessment.
Year-one state UI on a $60,000 tech: $261 at the new-employer rate (plus $42 FUTA).
Note: Rate holds until the employer has three years of chargeable experience. DC also runs the Paid Family Leave tax (0.75% on all wages) through the same account.
Florida Low Wage Base: $7,000
Agency: Florida Dept. of Revenue
2026 taxable wage base: $7,000 per employee. Experience rate range: 0.10%–5.40%.
New employer rate: 2.70% for the first 10 quarters (reemployment tax).
Year-one state UI on a $60,000 tech: $189 at the new-employer rate (plus $42 FUTA).
Note: At $7,000 and 2.7%, a new tech costs $189 a year in state UI, the lowest in the country alongside Tennessee and Arkansas. Florida calls it the reemployment tax; the 5.4% rate applies to employers delinquent more than a year.
Georgia Low Wage Base: $9,500
Agency: Georgia Dept. of Labor
2026 taxable wage base: $9,500 per employee. Experience rate range: 0.04%–8.10%.
New employer rate: 2.70% (2.64% plus 0.06% administrative assessment) for the first three years.
Year-one state UI on a $60,000 tech: $257 at the new-employer rate (plus $42 FUTA).
Note: Georgia has held the $9,500 base since 2013. Rates move to experience after 36 months of liability.
Hawaii High Wage Base: $64,500
Agency: Hawaii DLIR
2026 taxable wage base: $64,500 per employee. Experience rate range: 0.00%–5.60%.
New employer rate: 2.40% plus 0.01% Employment and Training assessment.
Year-one state UI on a $60,000 tech: $1,548 at the new-employer rate (plus $42 FUTA).
Note: Second-highest base in the country, indexed to the average annual wage; a $60,000 tech is taxed on every dollar.
Idaho High Wage Base: $58,300
Agency: Idaho Dept. of Labor
2026 taxable wage base: $58,300 per employee. Experience rate range: 0.208%–5.400%.
New employer rate: 1.000% for at least six quarters (standard rate), plus the workforce development and administrative reserve components.
Year-one state UI on a $60,000 tech: $583 at the new-employer rate (plus $42 FUTA).
Note: High base, low rate: a $60,000 tech costs $583 in year one. Idaho’s trust fund is among the healthiest, which keeps the schedule low.
Illinois Mid Wage Base: $14,250
Agency: Illinois IDES
2026 taxable wage base: $14,250 per employee. Experience rate range: 0.750%–7.050%.
New employer rate: 3.350% (2.800% plus 0.550% Fund Building Rate); new employers in NAICS 56 (administrative and support services, which includes some cleaning and landscaping) pay 3.450%.
Construction new employers: Construction new employers pay the standard 3.350% in 2026; the elevated construction rate was eliminated.
Year-one state UI on a $60,000 tech: $477 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $14,250 for 2026. Small employers (quarterly payroll under $50,000) get a cap on rates above 5.4%.
Indiana Low Wage Base: $9,500
Agency: Indiana Dept. of Workforce Development
2026 taxable wage base: $9,500 per employee. Experience rate range: 0.50%–7.40% (9.40% if delinquent).
New employer rate: 2.50% for the first four calendar years; construction new employers pay 2.5% or the lesser of 4.0% and the average construction rate.
Construction new employers: 2.50%, or lesser of 4.0% and construction industry average.
Year-one state UI on a $60,000 tech: $238 at the new-employer rate (plus $42 FUTA).
Note: Indiana holds new employers at the new rate for four years, longer than most states, which cuts both ways: a clean shop waits longer for a lower experience rate.
Iowa Mid Wage Base: $20,400
Agency: Iowa Workforce Development
2026 taxable wage base: $20,400 per employee. Experience rate range: 0.000%–5.400%.
New employer rate: 1.000% for non-construction new employers; 5.400% for new employers in construction (NAICS 23).
Construction new employers: 5.400% (maximum rate) for construction NAICS 23.
Year-one state UI on a $60,000 tech: $204 at the new-employer rate (plus $42 FUTA).
Note: Iowa cut its base from $39,500 to $20,400 in 2026 under SF 607 (2025), the largest reduction in the country. The construction penalty remains: an HVAC or plumbing shop classified in NAICS 23 pays the 5.4% maximum for its first three years, $1,102 per tech versus $204 for a cleaning company.
Kansas Mid Wage Base: $15,100
Agency: Kansas Dept. of Labor
2026 taxable wage base: $15,100 per employee. Experience rate range: 0.00%–6.95%.
New employer rate: 1.75% for non-construction new employers; 5.55% for construction (NAICS 23).
Construction new employers: 5.55% for construction.
Year-one state UI on a $60,000 tech: $264 at the new-employer rate (plus $42 FUTA).
Note: Kansas’s base rose to $15,100 in 2026 under the 2024 reform; construction new employers pay three times the general rate until they earn an experience rating.
Kentucky Mid Wage Base: $12,000
Agency: Kentucky Office of Unemployment Insurance
2026 taxable wage base: $12,000 per employee. Experience rate range: 0.30%–9.00%.
New employer rate: 2.70% for employers with under three years of experience; new construction employers pay the highest rate on the schedule (9.00% under Schedule A).
Construction new employers: 9.00% (highest schedule rate) for construction.
Year-one state UI on a $60,000 tech: $324 at the new-employer rate (plus $42 FUTA).
Note: The Service Capacity Upgrade Fund surcharge is suspended for 2026 and returns in 2027. Kentucky’s construction new-employer rule is the harshest in the country: $1,080 per tech in year one.
Louisiana Low Wage Base: $7,000
Agency: Louisiana Workforce Commission
2026 taxable wage base: $7,000 per employee. Experience rate range: 0.09%–6.20%.
New employer rate: Industry average rate for the employer’s NAICS code until eligible for experience rating (construction averages run roughly 2.5%–3.5%).
Construction new employers: Construction industry average (varies by year).
Year-one state UI on a $60,000 tech: $189–$245 at the new-employer rate (plus $42 FUTA).
Note: Base dropped from $7,700 to $7,000 in 2026 because the trust fund crossed the statutory trigger. Louisiana also adds a 0.6% social charge in some years.
Maine Mid Wage Base: $12,000
Agency: Maine Dept. of Labor
2026 taxable wage base: $12,000 per employee. Experience rate range: 0.00%–6.29% UI (6.60% combined).
New employer rate: 2.54% combined (2.23% UI + 0.15% CSSF + 0.16% UPAF).
Year-one state UI on a $60,000 tech: $305 at the new-employer rate (plus $42 FUTA).
Note: Maine’s Paid Family and Medical Leave contribution (1.0% total, split with employees for employers of 15+) began in 2025 and runs through the same portal.
Maryland Low Wage Base: $8,500
Agency: Maryland Dept. of Labor
2026 taxable wage base: $8,500 per employee. Experience rate range: 0.30%–7.50%.
New employer rate: 2.60% for new employers (statutory range 1.0%–2.6%; the 2026 assignment is 2.6%).
Year-one state UI on a $60,000 tech: $221 at the new-employer rate (plus $42 FUTA).
Note: Maryland has held the $8,500 base since 1993, the longest-frozen base in the country. The 2026 table is Table C after the trust fund rebuilt.
Massachusetts Mid Wage Base: $15,000
Agency: Massachusetts DUA
2026 taxable wage base: $15,000 per employee. Experience rate range: 0.94%–14.37%.
New employer rate: 2.42% for non-construction new employers (under three years); 6.08% for new construction employers.
Construction new employers: 6.08% for construction.
Year-one state UI on a $60,000 tech: $363 at the new-employer rate (plus $42 FUTA).
Note: On top of UI, employers pay the Workforce Training Fund (0.056%), the COVID assessment, and the Paid Family and Medical Leave contribution (0.88% total, employer share 0.42% for 25+ employees). Massachusetts’ maximum experience rate (14.37%) is the highest in the country.
Michigan Low Wage Base: $9,000
Agency: Michigan UIA
2026 taxable wage base: $9,000 per employee. Experience rate range: 0.06%–12.2% (15.2% with penalty).
New employer rate: 2.70% for the first two years; new construction employers pay the average construction industry rate (about 5.0% for 2026).
Construction new employers: Construction industry average (about 5.0%).
Year-one state UI on a $60,000 tech: $243 at the new-employer rate (plus $42 FUTA).
Note: Base is $9,000 for employers in good standing and $9,500 for delinquent employers. Michigan adds an obligation assessment in some years; none applies for 2026.
Minnesota High Wage Base: $44,000
Agency: Minnesota UI
2026 taxable wage base: $44,000 per employee. Experience rate range: 0.00%–8.90% plus 0.40%.
New employer rate: Industry-based new employer rate (1.00% to 8.90% depending on NAICS, plus 0.40% base tax rate); construction new employers are assigned the high-experience industry rate, 8.90% for most construction codes.
Construction new employers: 8.90% + 0.40% base for most construction NAICS.
Year-one state UI on a $60,000 tech: $616–$4,092 at the new-employer rate (plus $42 FUTA).
Note: A 14% additional assessment on UI tax applies for 2026 while the trust fund rebuilds. A new Minnesota HVAC shop pays about $4,000 per tech in year one, the highest in the country; Minnesota also launched its Paid Leave program (0.88% total) in January 2026.
Mississippi Mid Wage Base: $14,000
Agency: Mississippi MDES
2026 taxable wage base: $14,000 per employee. Experience rate range: 0.00%–5.40%.
New employer rate: 1.00% in year one, 1.10% in year two, 1.20% in year three, plus the Workforce Investment and Training contribution (0.20%).
Year-one state UI on a $60,000 tech: $140 at the new-employer rate (plus $42 FUTA).
Note: Among the cheapest states for a new employer despite the $14,000 base; rates step up gradually before experience rating.
Missouri Low Wage Base: $9,000
Agency: Missouri Division of Employment Security
2026 taxable wage base: $9,000 per employee. Experience rate range: 0.00%–6.00% plus adjustments.
New employer rate: 2.376% for all new employers, including construction (nonprofits 1.00%).
Construction new employers: 2.376% (same as general).
Year-one state UI on a $60,000 tech: $214 at the new-employer rate (plus $42 FUTA).
Note: Base fell from $9,500 to $9,000 in 2026 under the trust-fund formula (range $7,000–$13,000). Missouri doesn’t charge construction new employers more.
Montana High Wage Base: $47,300
Agency: Montana Dept. of Labor & Industry
2026 taxable wage base: $47,300 per employee. Experience rate range: 0.00%–6.12% plus 0.18% AFT.
New employer rate: Industry-based new employer rate, 1.00% to 2.00% by NAICS (construction at the high end, about 2.0%), plus 0.18% Administrative Fund Tax.
Construction new employers: About 2.0% for construction.
Year-one state UI on a $60,000 tech: $473–$946 at the new-employer rate (plus $42 FUTA).
Note: HB 210 (2025) automatically reduces rate schedules when the trust fund is high. Base indexed to $47,300 for 2026.
Nebraska Low Wage Base: $9,000
Agency: Nebraska Dept. of Labor
2026 taxable wage base: $9,000 per employee. Experience rate range: 0.00%–5.40%.
New employer rate: 1.25% for non-construction new employers; 5.40% for construction (NAICS 23).
Construction new employers: 5.40% for construction.
Year-one state UI on a $60,000 tech: $113 at the new-employer rate (plus $42 FUTA).
Note: Base is $9,000 for most employers but $24,000 for employers in the highest rate category (20), which includes construction new employers at 5.4%: $1,296 per tech in year one.
Nevada High Wage Base: $43,700
Agency: Nevada ESD
2026 taxable wage base: $43,700 per employee. Experience rate range: 0.25%–5.40% plus 0.05%.
New employer rate: 2.95% for new employers (14 to 17 quarters) plus 0.05% Career Enhancement Program tax.
Year-one state UI on a $60,000 tech: $1,311 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $43,700 for 2026 ($45,400 in 2027). Nevada’s new employer period runs 14 to 17 quarters, longer than most. Nevada also levies the Modified Business Tax on payroll over $50,000 a quarter.
New Hampshire Mid Wage Base: $14,000
Agency: New Hampshire Employment Security
2026 taxable wage base: $14,000 per employee. Experience rate range: 0.10%–7.00% before adjustments.
New employer rate: 1.70% (2.70% less a 1.00% trust fund reduction, adjusted quarterly).
Year-one state UI on a $60,000 tech: $238 at the new-employer rate (plus $42 FUTA).
Note: Rates adjust each quarter based on the trust fund; the July–June rate year and quarterly reductions mean the notice, not the statute, is the number to use.
New Jersey High Wage Base: $44,800
Agency: New Jersey Dept. of Labor
2026 taxable wage base: $44,800 per employee. Experience rate range: 0.50%–5.80% plus disability.
New employer rate: 2.80% employer UI (plus 0.50% disability for new employers) for the July 2025–June 2026 rate year; employees pay 0.425% UI plus family leave and disability on the same base.
Year-one state UI on a $60,000 tech: $1,254 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $44,800 for 2026 ($46,400 in 2027), and the July–June rate year means two different rates apply inside one calendar year. New Jersey repaid its federal loan, so no FUTA credit reduction.
New Mexico High Wage Base: $34,800
Agency: New Mexico DWS
2026 taxable wage base: $34,800 per employee. Experience rate range: 0.33%–5.40%.
New employer rate: The greater of 1.00% or the industry average rate for the employer’s NAICS code (construction averages run about 1.2%–2.0%); an excess claims rate up to 1% can be added.
Construction new employers: Construction industry average (about 1.2%–2.0%).
Year-one state UI on a $60,000 tech: $348–$700 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $34,800 for 2026. New Mexico’s new employer period lasts until the employer has 24 months of chargeable experience.
New York Mid Wage Base: $17,600
Agency: New York State Dept. of Labor
2026 taxable wage base: $17,600 per employee. Experience rate range: 1.625%–9.425% UI (1.7%–9.5% with RSF).
New employer rate: 4.10% (3.40% UI plus 0.075% re-employment service fund, rounded on the rate notice) for new employers.
Year-one state UI on a $60,000 tech: $722 at the new-employer rate (plus $42 FUTA).
Note: The 2025 budget raised the base from $12,800 to $17,600 for 2026 (indexed to the average weekly wage thereafter) as part of repaying the federal loan, which the state did in 2025, ending the FUTA credit reduction. A new New York shop pays $722 per tech in year one, up from $525. Employers also fund Paid Family Leave (employee-paid) and disability.
North Carolina High Wage Base: $34,200
Agency: North Carolina DES
2026 taxable wage base: $34,200 per employee. Experience rate range: 0.06%–5.76%.
New employer rate: 1.000% for new employers.
Year-one state UI on a $60,000 tech: $342 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $34,200 for 2026. The 2013 reform keeps rates low while the trust fund exceeds $1 billion; a $60,000 tech costs $342 in year one.
North Dakota High Wage Base: $46,600
Agency: Job Service North Dakota
2026 taxable wage base: $46,600 per employee. Experience rate range: 0.07%–9.67%.
New employer rate: 1.00% for positive-balance new employers (non-construction); 9.67% (the maximum rate) for new construction employers; 6.07% negative-balance.
Construction new employers: 9.67% (maximum rate) for construction.
Year-one state UI on a $60,000 tech: $466 at the new-employer rate (plus $42 FUTA).
Note: North Dakota charges new construction employers the top of the schedule on a $46,600 base: $4,506 per tech in year one, the most expensive combination in the country. Non-construction new employers pay $466.
Ohio Low Wage Base: $9,000
Agency: Ohio Dept. of Job and Family Services
2026 taxable wage base: $9,000 per employee. Experience rate range: 0.40%–10.10% plus 0.15%.
New employer rate: 2.85% (2.70% plus 0.15% mutualized rate) for non-construction new employers; 5.85% for construction.
Construction new employers: 5.85% (5.70% plus 0.15%) for construction.
Year-one state UI on a $60,000 tech: $257 at the new-employer rate (plus $42 FUTA).
Note: Ohio’s construction new-employer rate is more than double the general rate; on a $9,000 base that’s $527 versus $257 per tech.
Oklahoma High Wage Base: $25,000
Agency: Oklahoma OESC
2026 taxable wage base: $25,000 per employee. Experience rate range: 0.20%–5.80%.
New employer rate: 1.50% for new employers.
Year-one state UI on a $60,000 tech: $375 at the new-employer rate (plus $42 FUTA).
Note: Base fell from $28,200 to $25,000 in 2026 and drops again to $24,400 in 2027 under the trust-fund formula; Oklahoma’s base moves with the balance, not inflation.
Oregon High Wage Base: $56,700
Agency: Oregon Employment Department
2026 taxable wage base: $56,700 per employee. Experience rate range: 0.90%–5.40%.
New employer rate: 2.40% for new employers, plus the 0.135% special payroll tax offset; Paid Leave Oregon (1.0% total, employer 40% for 25+ employees) and the statewide transit tax (employee-paid 0.1%) are separate.
Construction new employers: None (general rate applies).
Year-one state UI on a $60,000 tech: $1,361 at the new-employer rate (plus $42 FUTA).
Note: Third-highest base in the country; a $56,700 base at 2.4% is $1,361 per tech before Paid Leave. Oregon indexes the base to the average weekly wage.
Pennsylvania Mid Wage Base: $10,000
Agency: Pennsylvania Office of UC Tax Services
2026 taxable wage base: $10,000 per employee. Experience rate range: 1.4190%–10.3734%.
New employer rate: 3.8220% for non-construction new employers (includes the 9.2% surcharge, 0.75% additional contribution and 0.5% interest factor); 10.5924% for new construction employers; employees pay 0.07% on all wages.
Construction new employers: 10.5924% for construction.
Year-one state UI on a $60,000 tech: $382 at the new-employer rate (plus $42 FUTA).
Note: Pennsylvania’s construction new-employer rate is the highest percentage in the country: $1,059 per tech on the $10,000 base, nearly triple the general rate. The base has been $10,000 since 2018.
Rhode Island High Wage Base: $30,800
Agency: Rhode Island DLT
2026 taxable wage base: $30,800 per employee. Experience rate range: 0.90%–9.40% plus 0.21% JDA.
New employer rate: 1.21% (1.00% UI plus 0.21% Job Development Assessment) for new employers; employees pay TDI/TCI (1.3%) on wages to $91,800.
Year-one state UI on a $60,000 tech: $373 at the new-employer rate (plus $42 FUTA).
Note: Two-tier base: $30,800 for most employers, $32,300 for negative-balance employers at the maximum rate. Indexed annually.
South Carolina Mid Wage Base: $14,000
Agency: South Carolina DEW
2026 taxable wage base: $14,000 per employee. Experience rate range: 0.000%–5.400% base (5.460% total).
New employer rate: 1.060% (1.000% base plus 0.060% contingency assessment) for new employers (rate class 12).
Year-one state UI on a $60,000 tech: $148 at the new-employer rate (plus $42 FUTA).
Note: Among the cheapest new-employer states east of the Mississippi: $148 per tech in year one on a $14,000 base.
South Dakota Mid Wage Base: $15,000
Agency: South Dakota DLR
2026 taxable wage base: $15,000 per employee. Experience rate range: 0.00%–9.50% plus fees.
New employer rate: 1.20% UI in year one, 1.00% in years two and three, plus 0.55% investment fee and 0.08% administrative fee; new construction employers pay 6.00% in year one and 3.00% in years two and three.
Construction new employers: 6.00% year one, 3.00% years two and three.
Year-one state UI on a $60,000 tech: $275 at the new-employer rate (plus $42 FUTA).
Note: South Dakota’s construction penalty is five times the general rate in year one: $983 versus $275 per tech (including fees).
Tennessee Low Wage Base: $7,000
Agency: Tennessee Dept. of Labor
2026 taxable wage base: $7,000 per employee. Experience rate range: 0.01%–10.00%.
New employer rate: 2.70% for new employers (July–June rate year) until three years of experience; manufacturing (NAICS 31–33) new employers pay a separate rate.
Year-one state UI on a $60,000 tech: $189 at the new-employer rate (plus $42 FUTA).
Note: Base is $7,000 while the trust fund exceeds $1 billion ($8,000 or $9,000 if it falls). At $189 per tech, Tennessee ties Florida for the cheapest new-employer UI in the country.
Texas Low Wage Base: $9,000
Agency: Texas Workforce Commission
2026 taxable wage base: $9,000 per employee. Experience rate range: 0.32%–6.32%.
New employer rate: The greater of 2.70% or the average rate for the employer’s NAICS industry (construction averages have run roughly 3%–5%) until the account has four chargeable quarters; includes the obligation assessment and employment training components when levied.
Construction new employers: Greater of 2.7% or construction industry average (about 3%–5%).
Year-one state UI on a $60,000 tech: $243–$450 at the new-employer rate (plus $42 FUTA).
Note: Texas’s $9,000 base has been fixed since 1989. The industry-average rule means a new plumbing or electrical shop (NAICS 238) is quoted the construction average, not 2.7%; check the TWC notice. See our Texas guide.
Utah High Wage Base: $50,700
Agency: Utah Dept. of Workforce Services
2026 taxable wage base: $50,700 per employee. Experience rate range: 0.10%–7.10%.
New employer rate: Industry-based new employer rate (the average rate for the employer’s NAICS code, plus the 0.3% social cost); most trades fall between 1.2% and 2.5%.
Construction new employers: Construction industry average (about 1.5%–2.5%).
Year-one state UI on a $60,000 tech: $608–$1,268 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $50,700 for 2026. Utah’s new employer period is the first year of liability plus the following year.
Vermont Mid Wage Base: $15,400
Agency: Vermont Dept. of Labor
2026 taxable wage base: $15,400 per employee. Experience rate range: 0.40%–5.40%.
New employer rate: 1.00% for most new employers from July 1, 2026 (rate year July–June); out-of-state (foreign) construction new employers pay 1.9% (NAICS 236), 4.0% (237) or 2.7% (238).
Construction new employers: Foreign construction: 1.9% / 4.0% / 2.7% by NAICS; in-state construction 1.0%.
Year-one state UI on a $60,000 tech: $154 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $15,400 for 2026. Vermont’s construction surcharge hits only employers headquartered outside the state.
Virginia Low Wage Base: $8,000
Agency: Virginia Employment Commission
2026 taxable wage base: $8,000 per employee. Experience rate range: 0.10%–6.20% plus add-ons.
New employer rate: 2.50% base new employer rate plus the pool cost and fund-building add-ons when levied (about 2.73% total in 2026).
Year-one state UI on a $60,000 tech: $200 at the new-employer rate (plus $42 FUTA).
Note: Virginia has held the $8,000 base since 2009; the add-ons vary by year and appear on the rate notice.
Washington High Wage Base: $78,200
Agency: Washington ESD
2026 taxable wage base: $78,200 per employee. Experience rate range: 0.24%–6.00% plus EAF.
New employer rate: 115% of the average rate for the employer’s NAICS industry (minimum 1.00%), plus the Employment Administration Fund (0.03%); construction new employers typically fall between 2.5% and 4.5%.
Construction new employers: 115% of construction industry average (about 2.5%–4.5%).
Year-one state UI on a $60,000 tech: $782–$2,700 at the new-employer rate (plus $42 FUTA).
Note: Highest base in the country, indexed to $78,200 for 2026 ($82,000 in 2027). A new Washington HVAC shop at 3.5% pays about $2,100 per tech, plus Paid Family and Medical Leave (0.92% total) and WA Cares (0.58%, employee-paid) through the same ESD account.
West Virginia Low Wage Base: $9,500
Agency: WorkForce West Virginia
2026 taxable wage base: $9,500 per employee. Experience rate range: 1.40%–7.00%.
New employer rate: 2.70% for the first 36 months for in-state new employers; 7.50% for out-of-state (foreign) construction corporations.
Construction new employers: 7.50% for foreign construction corporations; 2.70% in-state.
Year-one state UI on a $60,000 tech: $257 at the new-employer rate (plus $42 FUTA).
Note: Rates fell 7% across the board on July 1, 2026 under the 2025 reform. Base is fixed at $9,500 by statute.
Wisconsin Mid Wage Base: $14,000
Agency: Wisconsin DWD
2026 taxable wage base: $14,000 per employee. Experience rate range: 0.00%–12.00%.
New employer rate: 3.05% for new employers with payroll under $500,000 (3.25% at $500,000 or more), including the solvency rate; construction new employers pay 2.50% / 2.70% (the construction industry average, lower than the general rate in 2026).
Construction new employers: 2.50% (under $500,000) / 2.70% (over) for construction.
Year-one state UI on a $60,000 tech: $427 at the new-employer rate (plus $42 FUTA).
Note: Wisconsin is the one state where construction new employers currently pay less than general new employers, because the rate is the construction industry average and that industry’s experience has been good. Base fixed at $14,000 since 2013.
Wyoming High Wage Base: $33,800
Agency: Wyoming Dept. of Workforce Services
2026 taxable wage base: $33,800 per employee. Experience rate range: 0.10%–8.50%.
New employer rate: Industry base rate for the employer’s NAICS code plus adjustment factors (about 1.69% for the average new employer; construction codes run higher).
Construction new employers: Construction industry base rate (varies by NAICS, roughly 2%–4%).
Year-one state UI on a $60,000 tech: $571–$1,352 at the new-employer rate (plus $42 FUTA).
Note: Base indexed to $33,800 for 2026 ($34,900 in 2027). Wyoming also runs workers’ comp through the same department.
Wage bases and rates for calendar 2026 (or the July 2025–June 2026 rate year in New Hampshire, New Jersey, Tennessee and Vermont) current as of October 2026, compiled from state agency rate notices and tax-practitioner surveys. Industry-average new-employer rates (Louisiana, Minnesota, Montana, New Mexico, Texas, Utah, Washington, Wyoming) are approximations for construction codes; the rate on your notice governs. Year-one costs exclude surcharges, assessments, paid-leave contributions and employee-paid shares except where noted. This is a survey for operating a business, not tax advice.
Running the Business
- The rest of the first-hire stack: workers’ comp owner exemptions by state, E-Verify requirements by state, pay frequency laws by state.
- Keeping the rate down: overtime laws by state (scheduling instead of layoffs) and final paycheck laws by state (documenting the separation that decides the claim).
- The 1099 alternative isn’t one: the 1099 helper in the van trap covers what happens when the state UI auditor reclassifies him.
- Deducting it: tax deductions for trades business owners.
Know Who Worked When Before the Claim Notice Arrives
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FAQ
What is the SUTA wage base for 2026?
It’s set by each state. The lowest are $7,000 (Arkansas, California, Florida, Louisiana, Tennessee); the highest are Washington ($78,200), Hawaii ($64,500), Idaho ($58,300), Oregon ($56,700) and Alaska ($54,200). Eighteen states are at $25,000 or more, fifteen between $10,000 and $24,999, and eighteen (including DC) under $10,000. Twenty-two states index the base to wages each year; the rest change it by statute or trust-fund formula or leave it fixed (Maryland’s $8,500 hasn’t moved since 1993, Texas’s $9,000 since 1989).
What is the new employer SUTA rate and how long does it last?
A flat rate assigned to every new account until it has enough history to be experience-rated. Standard new rates for 2026 run from 1.0% (Alaska, Delaware, Idaho, Iowa, Mississippi, North Carolina, North Dakota, Vermont) to 4.1% (New York); 2.7% is the most common. It lasts two years in Arizona and Michigan, about three in most states (Florida’s 10 quarters, Texas’s four chargeable quarters, West Virginia’s 36 months), and four in Indiana and Nevada. Sixteen states assign construction new employers a higher rate, usually the construction industry average or the schedule maximum.
Why does my HVAC company pay a ’construction’ unemployment rate?
Because the NAICS code on your state registration is 238 (specialty trade contractors), which covers HVAC, plumbing, electrical, roofing and most building installation and repair work, and 16 states assign construction new employers a higher rate based on the industry’s seasonal layoff history. Pennsylvania charges 10.59%, North Dakota 9.67%, Kentucky 9.0%, Minnesota 8.9%, Massachusetts 6.08%, South Dakota 6.0%, Ohio 5.85%, Kansas 5.55%, Iowa and Nebraska 5.4%, Michigan about 5.0%, and Colorado, Texas, Washington, Wyoming, Utah, Louisiana, New Mexico and Montana use industry averages. Locksmiths, appliance repair, cleaning, pest control and landscaping aren’t construction codes. If your business is mostly service and repair, ask the agency whether a different code fits; most follow the code on the registration.
How much does unemployment tax cost per employee?
State UI: the new-employer rate times the lesser of the wage base and the employee’s wages. On a $60,000 technician at the standard new rate: $189 in Florida and Tennessee, $160 in Arizona, $243 in Texas (more at the construction average), $245 in California, $477 in Illinois, $722 in New York, $933 in Colorado, $1,254 in New Jersey, $1,361 in Oregon, $1,548 in Hawaii, and $782 to $2,700 in Washington depending on industry. Construction surcharges push it to $1,059 in Pennsylvania, $1,080 in Kentucky, $1,296 in Nebraska and $4,506 in North Dakota. Add federal FUTA of $42 ($147 or more in California for 2026).
What is the FUTA rate for 2026?
6.0% on the first $7,000 of each employee’s wages, less a 5.4% credit for timely state UI payments, for a net 0.6% or $42 per employee. The credit is reduced in states with an outstanding federal UI loan: California’s 2025 reduction was 1.2% ($126 per employee, paid on the Form 940 due February 2, 2026), and for 2026 it’s headed to at least 1.5% ($147) unless the state repays by November 10, 2026. New York and Connecticut repaid in 2025 and have no reduction. Deposits are due quarterly once the liability exceeds $500; Form 940 is due January 31.
Can I lower my new employer rate?
Not the new rate itself, but you can shorten the damage. Respond to every claim notice within the deadline (usually 10 days) with documentation of a quit, misconduct or refusal of work, so ineligible claims aren’t charged to your account. Avoid seasonal layoffs if reduced hours can carry the crew. Once you’re experience-rated, about half the states allow a voluntary contribution within 30 days of the rate notice to buy down a bracket. Don’t try to get a fresh new-employer rate by forming a new entity; SUTA dumping is a crime in every state under the 2004 federal law.
Do employees pay unemployment tax?
In three states: Alaska (0.5% on wages to $54,200), New Jersey (0.425% UI plus family leave and disability contributions on wages to $44,800) and Pennsylvania (0.07% on all wages). Everywhere else SUTA is employer-only. Separately, employees fund paid family leave or disability programs in California, Colorado, Connecticut, DC (employer-paid), Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island and Washington, often through the same agency account.
Which states changed their wage base for 2026?
Increases: Alaska ($54,200), Colorado ($30,600), Connecticut ($27,000), Delaware ($14,500), Hawaii ($64,500), Idaho ($58,300), Illinois ($14,250), Kansas ($15,100), Kentucky ($12,000), Minnesota ($44,000), Montana ($47,300), Nevada ($43,700), New Jersey ($44,800), New Mexico ($34,800), New York ($17,600, from $12,800), North Carolina ($34,200), North Dakota ($46,600), Oregon ($56,700), Rhode Island ($30,800), Utah ($50,700), Vermont ($15,400), Washington ($78,200), Wyoming ($33,800). Decreases: Iowa ($20,400, from $39,500), Oklahoma ($25,000, from $28,200), Louisiana ($7,000, from $7,700), Missouri ($9,000, from $9,500). Everyone else held.
What’s the difference between SUTA, SUI and FUTA?
SUTA (State Unemployment Tax Act) and SUI (state unemployment insurance) are the same thing: the state tax that funds regular unemployment benefits, paid at a rate the state assigns on a wage base the state sets. FUTA is the federal tax (0.6% net on $7,000) that funds administration and the federal share of extended benefits. Florida calls its SUTA ’reemployment tax,’ and some states call it ’contributions.’ Workers’ compensation is separate and privately insured in most states.
When do I have to register for state unemployment tax?
In most states, as soon as you pay wages to a covered employee: the federal test is $1,500 in wages in a calendar quarter or one employee in 20 weeks, and most states adopt it or set a lower bar (New York, California, Illinois and others cover the first dollar of wages or the first employee). Register with the state agency before the first quarterly return is due (April 30, July 31, October 31, January 31). Late registration brings penalties plus interest on the back tax, and the state will assign the new rate retroactively.
Bottom Line
For most trades shops, state UI on a new tech is a few hundred dollars a year: $189 in Florida and Tennessee, $200–$600 across the South, Midwest and Mid-Atlantic, $700–$1,400 in the high-base states of the West and Northeast. The exceptions are the construction surcharges (Pennsylvania, Kentucky, North Dakota, Minnesota, Ohio, Iowa, Kansas, Nebraska, South Dakota, Massachusetts, Michigan) and the high-base states with industry rates (Washington, Colorado), where a construction-coded new employer pays $1,000 to $4,500 per tech for the first few years. Check the NAICS code on your registration: a service-and-repair shop coded as 238 may be paying for an installer’s layoff history.
Then protect the experience rate you’ll earn in year three or four. Answer every claim notice, document every separation, don’t lay off for the winter if scheduling can carry the crew, and look at the voluntary-contribution option when the rate notice arrives. A shop that does those four things sits at or near the state minimum for the life of the business; one that doesn’t pays the maximum, and in Massachusetts the maximum is 14.37%.
