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17 February 2026

Iowa law lowers SUI wage base and maximum SUI tax rate for 2026

As a result of recent legislation (SF 607), the Iowa Workforce Development (Department) announced that employers will have lower state unemployment insurance (SUI) costs beginning in 2026 due to a reduced taxable wage base and a lower maximum SUI tax rate.

SUI wage base

The SUI taxable wage base for calendar year 2026 is $20,400, down from $39,500 in calendar year 2025.

SUI tax rates

SF 607 simplified Iowa's SUI tax tables and cut the maximum SUI tax rate from 9% to 5.4%.

Currently, employers pay SUI taxes based on an assigned experience rate multiplied by the state's taxable wage base, which is set as a fraction of the prior year's average annual wage. SF 607 reduced that fraction from two-thirds to one-third of the average annual wage. The Department recalculates the average annual wage each year as part of the process used to determine maximum and minimum unemployment benefits.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2026-0449

 

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