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Most Alabama employers to see 54 percent unemployment insurance tax cut

This is the first time Alabama has dropped into Schedule A, the lowest tax rate schedule, since 1997.

Filling in unemployment insurance

Alabama Department of Labor Secretary Fitzgerald Washington announced Thursday that most Alabama employers will see a 54 percent tax cut in their 2023 unemployment insurance taxes and the state has dropped into the lowest tax rate schedule.

“Following the economic uncertainty and the record-breaking amount of unemployment compensation benefits paid out during the pandemic, it is absolutely remarkable that we have been able to lower taxes for employers and drop to the lowest tax rate schedule in this short amount of time,” Washington said.

This is the first time Alabama has dropped into Schedule A, the lowest tax rate schedule, since 1997. This year’s average tax rate is also the lowest in recorded history.  

Additionally, no shared costs will be incurred by employers this year, following several years of shared costs collections related to the pandemic.

“This announcement today is further proof of how well Alabama is recovering from the pandemic  — not in nearly 30 years have our employers seen a UI tax schedule at the lowest level — and the rates are the lowest in history, to boot,” said Gov. Kay Ivey. “Our economic decisions during this time of national economic uncertainty are paying off by putting more money in employers’ tills and allowing them to hire more Alabamians, benefiting the state as a whole. I’m beyond proud to lead an administration that is delivering real, effective tax savings to our people.”

The current Alabama Unemployment Tax Schedule consists of four tax rate schedules: A, B, C, and D. The original intent of the four schedules was to assist in the recovery of benefit costs so that the UI Trust Fund, from which benefits are paid, will neither become depleted nor collect excess revenue. The objective is to maintain an adequate balance so that benefits can be paid when necessary. Therefore, the balance in the trust fund determines which schedule will be in effect for the upcoming calendar year.

“Lower taxes allow businesses to hire more employees and spur spending,” continued Washington. “This record low tax rate is further evidence of Alabama’s economic recovery and shows how resilient we have been as a state.”

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Business owners can now download their individual 2023 unemployment insurance tax rate notices online at Customers should simply login to their eGov account to see their rate.

Unemployment Insurance taxes are paid 100% by employers on the first $8,000 of wages earned per employee.

For questions regarding a business’s unemployment insurance tax rate, please call (334) 954-4741.nemployment insurance tax rate, please call (334) 954-4741.

Jacob Holmes is a reporter at the Alabama Political Reporter. You can reach him at [email protected]

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