For the second consecutive year, Iowa’s payroll tax rates will be the lowest allowed by state law, Gov. Reynolds announced on Monday, Aug. 28.
“Today’s announcement will be welcome news to any Iowa business that may be fearing the impact of the uncertainty in the economy on a national level,” said Gov. Reynolds. “We have done everything possible to insulate Iowa employers from ongoing inflation and other rising costs and our efforts have ensured that the tax burden for employers in Iowa will be the lowest possible rate for the second time in the last 25 years.”
Each year, Iowa law requires the Iowa Workforce Development to establish a table in order to determine the impact of unemployment tax rates on eligible employers. The tables are determined by a formula based primarily on the balance in the Unemployment Insurance Trust Fund, unemployment benefit history, and covered wage growth.
The latest calculations based on this formula mean contribution rates in 2024 will once more be drawn from Table Eight. Last year, the switch to Table Eight from Table Seven saved employers an estimated $72.20 per employee, a switch made in part by Gov. Reynolds’ decisions that helped keep the Unemployment Insurance Trust Fund in a strong position following record benefit payouts during the pandemic.
In 2021, Gov. Reynolds invested $237 million in ARP funds into the trust fund. In 2020, Reynolds previously had directed that $490 million of Cares Act coronavirus relief funds be used to backstop the trust fund during record unemployment.
