Iowa Halves Unemployment Insurance Wage Base, Lowers Taxes

Iowa is decreasing its unemployment insurance taxes and wage base, effective starting in 2026.

SF 607 lowers the number of unemployment tax rate tables to four from eight while also reducing the number of different tax rates within each table to nine from 21. These modifications decrease tax rates, with the maximum rate dropping to 5.4% from the 9% possible under current state law.

For context, Iowa’s lowest possible contribution rate table is currently in effect for 2025, and the maximum tax rate under that table is 7%.

New employers will have their unemployment tax rates reduced because their ...