Iowa Workforce Development Communications
For Immediate Release
Date: September 4, 2015
Contact: Courtney Greene
Iowa Workforce Development Releases Employer Unemployment Insurance Tax Table Changes
Des Moines, IA – Iowa law requires Iowa Workforce Development establish the tax table that will be used to determine the unemployment tax rate for eligible employers each year. The unemployment insurance rate table trigger formula is primarily based on the trust fund balance, unemployment benefit payment history and covered wage growth. The formula is designed to enable the trust fund to keep pace with potential liabilities as covered employment and wages grow.
Based on this formula, the contribution rate table will move from Table 7 in 2015 to Table 6 in 2016. This will cause the estimated average contribution rate for employers will increase from 1.24 percent to 1.57 percent. Even though rates increased, Table 6 represents a significant recovery from 2010 through 2012 when record benefit payouts triggered Tables 3 and 4. Table 6 is the most frequently triggered table. Table 6 has been triggered nine out of the last 14 years.
Iowa Workforce Development Director Beth Townsend praised the stability within the Unemployment Insurance Trust Fund saying, “While the change to the unemployment tax rate is less than favorable, Iowa’s unemployment tax rate is among the lowest in the nation, due to the strength of our trust fund. That, coupled with sound fiscal management, prevented Iowa from having to borrow federal funds during the most recent recession. We still have a large number of zero-rated employers and new, non-construction employers continue to pay 1.0 percent, one of the lowest tax rates in the country.”