Currently, 27 states and jurisdictions have updated their taxable wage base for 2020. 15 jurisdictions have changed their minimum unemployment tax rate, and 15 changed their maximum unemployment tax rate.
The taxable wage base represents how much of an employee’s yearly earned income is taxable at the employer’s unemployment tax rate. For instance, if an employee makes $50,000 annually in Colorado, and the employer’s unemployment tax rate is 5%. In 2020, they will pay 5% on the first $13,600 of the employee’s wages, which is $6.00 in this example.
Contact your Employers Edge tax analyst if you have any questions about how changes to the taxable wage base can affect your unemployment tax expenditures.