Home Business Unemployment insurance payroll tax to remain at lowest possible in 2024 – Newton Daily News

Unemployment insurance payroll tax to remain at lowest possible in 2024 – Newton Daily News

by Cedric Guzman

Iowa Workforce Development and Governor Kim Reynolds have announced that unemployment insurance rates for Iowa employers will remain at the lowest possible level allowed by law in 2024. This is the second consecutive year that the rates have remained at this level, and it marks only the second time in the past 25 years that Iowa’s rates have been this low.

Governor Reynolds stated that every effort has been made to protect Iowa employers from rising costs and inflation. Their efforts have ensured that the tax burden for Iowa employers will be at the lowest possible rate for the second time in a quarter century. This commitment to supporting businesses is a testament to the state’s dedication to fostering a favorable business environment.

Beth Townsend, executive director of Iowa Workforce, commended the wise investments and prudent stewardship of the Unemployment Insurance Trust Fund under Governor Reynolds. These actions have provided stability to Iowa’s employers and have contributed to the health and sufficient funding of the Unemployment Insurance Trust Fund. Additionally, the efforts of the Reemployment Case Management program in swiftly returning Iowans to work have played a significant role in preserving the financial health of the fund.

According to Iowa law, the Iowa Workforce Development is required to establish a table each year to determine the impact of unemployment tax rates on eligible employers. The decision on which unemployment insurance rate table to implement is based on a formula that considers factors such as the balance in the Unemployment Insurance Trust Fund, unemployment benefit history, and covered wage growth.

Based on the latest calculations using this formula, contribution rates in 2024 will again be drawn from Table 8. This change to Table 8 in the previous year saved employers an estimated $72.20 per employee, assuming employees earn $36,100 or more and employers pay the median tax rate while remaining in the same tax rank.

The ability to switch to Table 8 in 2023 was made possible by Governor Reynolds’ decisions to maintain the strength of the unemployment trust fund following the significant payouts during the pandemic. In 2021, Governor Reynolds allocated $237 million of ARP funds to the trust fund, and in 2020, she directed $490 million of CARES Act funds to support the fund during the peak of unemployment.

Overall, Iowa’s commitment to keeping unemployment insurance rates at their lowest possible level demonstrates their dedication to supporting businesses and fostering a stable economic environment. These efforts provide valuable support to Iowa’s employers, ensuring that they can continue to thrive and contribute to the state’s overall economic well-being.

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