Unemployment insurance (UI) taxes remain one of the most variable—and consequential—components of employer payroll costs. At the federal level, FUTA (Federal Unemployment Tax Act) applies at 6.0% on the first $7,000 of wages per employee, with most employers receiving up to a 5.4% credit for timely payment of state unemployment taxes—yielding a typical net FUTA rate of 0.6%. The $7,000 FUTA wage base itself has not changed since 1983, and it remains $7,000 for 2026.
State UI (often called SUTA/SUI) is where the real movement happens. Every state sets its own taxable wage base, publishes tax-rate schedules keyed to trust-fund solvency, and may layer on surcharges or assessments. For 2026, employers will see a mix of targeted increases in taxable wage bases, stability in certain rate schedules, and important changes to state-specific surcharges that were in play during 2025.
What’s new for 2026 Unemployment Tax (vs. 2025)?
1) Taxable wage bases: many states up, some flat
A number of states announced 2026 wage-base adjustments tied to average wages and/or trust-fund formulas:
- Washington: The taxable wage base rises from $72,800 (2025) to $78,200 (2026), reflecting growth in the state’s average annual wage. This is one of the highest wage bases in the nation and materially increases UI exposure for higher-earning roles.
- Oregon: Oregon will remain on Tax Schedule 3 in 2026, and its taxable wage base increases 4.4% from $54,300 (2025) to $56,700 (2026). New-employer rates stay steady.
- Wyoming: The wage base increases from $32,400 (2025) to $33,800 (2026).
- New York: After paying off its federal UI loan, New York’s 2026 taxable wage base rises modestly from $12,800 to $13,000; from 2027 forward it will index to 16% of the NYS average annual wage.
Industry roundups corroborate that many jurisdictions adopted higher 2026 bases (with a few still pending finalization as of late November), while some states remain at the FUTA minimum (e.g., CA and AR at $7,000) or their long-standing statutory levels (e.g., TX at $9,000).
2) Rate schedules: mostly stability, pockets of easing
States continue to use solvency-triggered schedules. Notable for 2026:
- Oregon holds at Schedule 3 for 2026, signaling stability in the state’s trust-fund status and keeping the rate brackets steady year-over-year.
- Texas confirms its $9,000 taxable wage base and continues to compute employer-specific effective rates from multiple components (general tax, replenishment, deficit, and obligation assessments). A November 2025 discussion paper estimated a 0.01% obligation assessment for 2026 to cover minor Title XII interest—an example of how small, formula-driven components can subtly change your effective rate even when the base stays flat.
Other states will send 2026 unemployment tax rate notices through December/January as usual; the headline for most employers is to read your notice carefully—states can keep the same schedule while your individual experience-rated factor still shifts based on chargebacks and payroll growth.
3) Surcharges & special assessments: some relief arrives
The most consequential surcharge news this year is in New York:
- New York eliminated the Interest Assessment Surcharge (IAS) after the FY 2026 budget paid off the state’s federal UI loan. That removes a line-item cost NY employers faced during 2021–2024 and reduces both state and federal UI burdens starting with 2026. State communications further note 2026 UI contribution rates will decrease relative to 2025.
California, by contrast, remains in long-term repayment mode and continues to operate on its highest rate schedule “F,” with a statutory 15% surcharge when the fund’s reserve ratio falls below threshold—contributing to elevated employer UI costs. (California’s UI debt is projected to persist into 2026.)
4) FUTA credit-reduction map for 2025 filings (impacting early-2026 cash flow)
Because FUTA is settled annually on Form 940 due January 31, 2026, credit-reduction states for tax year 2025 still affect what you’ll pay now:
- California and the U.S. Virgin Islands are 2025 credit-reduction jurisdictions (CA at 1.2% reduction; VI at 4.5%), increasing employers’ FUTA outlay for 2025 wages filed on the 2025 Form 940. New York repaid its loan ahead of the November 10, 2025 deadline and avoided a 2025 credit reduction.
Bottom line: Expect higher 2026 state UI taxable wages in several jurisdictions (raising your state UI spend), stable schedules in some states (e.g., Oregon), small component tweaks in others (e.g., Texas OA), and relief from New York’s IAS plus no NY credit reduction on the 2025 FUTA filing.
What this means for multi-state employers
- Budget on the new bases. Update your payroll cost models for Washington ($78,200), Oregon ($56,700), Wyoming ($33,800), and New York ($13,000), among others, and refresh merit-increase budgets for high-wage roles in high-base states.
- Read your 2026 rate notices—and challenge errors. Schedule changes can be subtle, but erroneous benefit charges and late account updates move your experience rate. Many states mail notices in December; address discrepancies immediately to prevent inflated 2026 rates. (Oregon and Texas publish clear guidance on how components and experience interact—use it.) Oregon+1
- Mind the federal/state interaction. The FUTA wage base remains $7,000, but 2025 credit-reduction outcomes must still be reconciled on your 2025 Form 940 this January. If you paid 2025 wages in California or the Virgin Islands, budget for the extra FUTA.
- Track surcharges and sunsets. New York employers should see relief with the IAS gone in 2026; California employers should plan for continued elevated UI costs tied to long-term fund solvency.
How Experian Employer Services helps
- Proactive 2026 unemployment tax rate monitoring & modeling: We track each state’s wage-base releases, solvency triggers, and component assessments, then quantify the impact to your location mix and headcount plan. (Our team maintains a 50-state matrix of 2026 changes and flags late announcements.)
- Charge audit & protest: We identify erroneous charges that inflate your experience rate and manage protests end-to-end against state deadlines—critical when your 2026 notice lands during year-end close.
- FUTA credit-reduction navigation: We determine whether your 2025 wages in CA or VI trigger additional FUTA, reconcile Schedule A, and forecast scenarios for 2026-2027 so there are no surprises. OUI
- Executive-ready reporting: Clear variance analysis (2026 vs. 2025) by state, cost center, and wage bands so finance and HR can align on budgets and pricing.
We assist our clients with this process every year. If you aren’t a current customer, contact us so we can show you how we can reduce your 2026 unemployment tax risk.