Unemployment and Disability Insurance Taxable Wage Bases by State

Author: Alice Gilman

Employers are liable for federal unemployment insurance tax, based on the wages they pay to their employees, up to a taxable wage base of $7,000 per year. Wages paid to employees that exceed the federal taxable wage base are not subject to federal unemployment taxes. The $7,000 wage base is set by law and can only increase or decrease if Congress passes legislation changing it. Federal unemployment taxes support functions of the federal Department of Labor's Employment and Training Administration, as well as certain administrative functions of state unemployment agencies.

Similarly, most employers also pay state unemployment insurance contributions, based on the wages they pay to their employees, up to a state taxable wage base. These contributions fund unemployment benefits for employees who lose their jobs through no fault of their own. Some states set their taxable wage base in law, while other states inflation-adjust it every year.

A handful of states also have disability insurance systems with employer and/or employee contributions tied to a taxable wage base. The disability wage base may, but is not required to, be the same as the state unemployment insurance wage base. In addition, Massachusetts has a taxable wage base for Employer Medical Assistance Contributions (EMAC).

The following chart provides employers with each state's current unemployment and disability insurance (if applicable) taxable wage base. States that do not require disability insurance contributions are designated as "N/A" - Not Applicable. Amounts that have changed or will change from the previous year are highlighted in bold face.