(Des Moines) Governor Kim Reynolds announced that for the fourth consecutive year, unemployment insurance rates will be at the lowest level allowed by law.
Earlier this summer, Governor Reynolds signed legislation that revamped Iowa’s unemployment insurance taxes, reducing the taxable wage base by nearly half and decreasing the maximum tax rate to the lowest allowed by federal law (5.4%). The legislation is estimated to result in nearly $1 billion in savings for Iowa businesses over the next five years.
By signing SF 607, Governor Reynolds also simplified the unemployment tax system, reducing the number of employer contribution rate tax tables from eight to four. Iowa law requires Iowa Workforce Development to establish a table each year to determine the unemployment tax rates on eligible employers. The trigger for deciding which unemployment insurance rate table to implement is based on a formula using the balance in the Unemployment Insurance Trust Fund, and covered wage growth. As determined by the formula, the contribution rates that employers will pay in calendar year 2026 will be drawn from the new Table D, the lowest allowed by law.
As of August 15, 2025, the Unemployment Insurance (UI) Trust Fund had a balance of $2,010,834,696.77.
