Most states have released their state unemployment insurance (SUI) taxable wage bases for 2020. Employers should be aware that due to UI trust fund balances that are lower (or higher) than anticipated and economic concerns regarding employer taxes, some states may make changes to their taxable wage bases later this year or early next year.
The APA website has a list of the SUI taxable wage bases from 2017-2020, and it will continue to be updated with the wage bases of the remaining states.
Following the Federal Unemployment Tax Act (FUTA) scheme, SUI contributions (taxes) are determined by applying a certain percentage to the taxable wages paid by the employer. FUTA requires that each state’s taxable wage base must at least equal the FUTA taxable wage base of $7,000 per employee, and most states have wage bases that exceed the required amount. The states use various formulas for determining the taxable wage base, with a few tying theirs by law to the FUTA wage base and others using a percentage of the state’s average annual wage.
For more information on SUI wage bases and tax rates, see APA’s Guide to State Payroll Laws (online version or softcover book), Table 8.2 – Unemployment Insurance Taxable Wage Bases, Contribution Rates, and Experience Rating Methods.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA.