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Tax Rates

There are two types of UI tax rates, new employer rates and "earned" rates. The new employer rate is assigned to employers who have less than one fiscal year (July 1 to June 30) of reporting experience. Earned rates are assigned to employers with one or more fiscal years of reporting experience.

How are New Employer Rates Determined?

New employers are assigned a benefit ratio based on the two year average benefit ratio of all employers in their respective industry. The average benefit ratio is used to determine the overall rate for a new employer. New out-of-state contractors are assigned the maximum tax rate (7.3%) allowable under state law unless they purchase an existing business.

New employer rates are assigned upon completion of the New Employer Registration process. If you register on-line, the tax rate assigned will become effective after it has been reviewed by the department. If you mail or fax the registration form, you will receive a notice of your new employer tax rate in the mail.

New employers may qualify for a rate based on their actual benefit ratio after they have paid wages for a period of one fiscal year (July 1 through June 30) prior to the rate computation date.

How are Earned Rates Calculated?

Your overall contribution rate will be calculated annually using the following three components:

To calculate your overall tax rate, the following formula is used:

Benefit Ratio X Reserve Factor + Social Cost

In addition, a 1% surcharge will be added to the overall tax rate if the employer or the previous owner of the business has unpaid contributions for the prior fiscal year (July 1 - June 30).

What are the Current Minimum and Maximum Tax Rates?

For 2024, the minimum overall tax rate is .3% and the maximum overall tax rate is 7.3%. Employers who have not paid all contributions for the fiscal year ending June 30th may be assessed a delinquent payment surcharge of 1.0%, which is in addition to the overall tax rate.

What is the Current Taxable Wage Base?

During 2024, the taxable wage base is $47,000.00. Utah employers are only liable for state UI taxes on wages paid to each employee up to the taxable wage base. All wages paid to each employee above the base are considered Excess Wages and are still reported but not taxed.

How Can I Lower My Unemployment Tax Costs?

Utah's ''benefit ratio" system for calculating unemployment insurance tax rates allows you the opportunity to manage your unemployment tax costs. For specific recommendations from the Department on managing these costs, please check out Controlling Unemployment Tax Costs.