Gov. Kim Reynolds announced last week that Iowa employers will pay the lowest unemployment insurance rates allowed by law for the fourth consecutive year. The announcement comes after legislation signed earlier this summer simplified Iowa’s unemployment tax system by reducing the taxable wage base by nearly half and lowering the maximum tax rate to 5.4 percent, which is the lowest value allowed by federal law. Legislators claim the changes will save Iowa businesses nearly $1 billion over the next five years. The law also cut the number of employer contribution rate tables from eight to four. Iowa Workforce Development (IWD) determines the appropriate table each year based on the balance in the state’s Unemployment Insurance Trust Fund and wage growth. For 2026, rates will be drawn from Table D, which represents the lowest possible rates. Reynolds says, “I am proud of the efforts we have made to reduce the unemployment tax burden on Iowa’s businesses while maintaining benefits for Iowans who need them. Reducing taxes should lead to employers having more resources to invest in growing and upskilling their workforce, which will help grow our economy.” As of Aug. 15, Iowa’s Unemployment Insurance Trust Fund held more than $2 billion.
