last updated May 28, 2010

How do we stack up?
Average unemployment cost per employee, per state

In a sense, you cannot usefully compare the rate you pay in one state to the rate another employer pays in another state, because those rates are paid on very different taxable wage bases. In one state, you may apply your rate to the first $7,000 an employee earns; whereas in another state you may apply your rate to the first $35,000 an employee earns.

So what we do on this table is compare the average tax rates in the different states to all the employees in that state, to determine an average cost per employee.

Note how states with higher taxable wage bases are mostly in the high half of this expense table. Raising the taxable wage base is a covert but very effective way to hike your taxes. Many states adopt legislation which raises this wage base automatically each year, so that they never have to take the blame for raising the rate, while taxes are automatically increased, year after year.

Of course, average rates vary dramatically from one type of business to another, according to conditions affecting that type of business. And, the same tax rate will yield different costs depending on turnover, since the tax will be paid all over again for each employee who fills the same position.

Here, nevertheless, are the average costs1 per state in 2009, the last year for which data was generated. But note these options:

  1. To sort this list alphabetically by state, click on the link "state" below.
  2. To sort this list by taxable wage base, low to high, click on "wage base" below.
  3. To sort this list by the assigned tax rate as applied to the taxable wage base, click on "tax rate" below.
  4. To sort this list by the effective tax rate (called "wage rate" here) as applied to all the wages paid, not just the taxable wage base, click on "wage rate" below.
  5. To sort this list by the average dollar cost of this tax per employee, click on "cost per empl;oyee" below.
Rank State Wage Base Tax Rate Wage Rate Cost Per Employee2
1 Alaska $34,100 1.31% 1.00% $0
2 Delaware $10,500 2.60% 0.63% $0
3 $22,200 0.18% 0.10% $35
4 Oklahoma $14,900 0.57% 0.22% $82
5 New Hampshire $10,000 1.24% 0.26% $119
6 North Dakota $24,700 1.41% 0.33% $122
7 Virginia $8,000 1.56% 0.31% $147
8 Mississippi $7,000 1.73% 0.45% $148
9 Louisiana $7,000 1.63% 0.36% $151
10 South Dakota $10,000 1.51% 0.47% $151
11 Utah $28,300 0.71% 0.40% $152
12 Arizona $7,000 2.00% 0.42% $171
13 South Carolina $7,000 2.25% 0.52% $185
14 Georgia $8,500 2.25% 0.51% $215
15 Indiana $7,000 2.98% 0.63% $242
16 $7,000 3.17% 0.99% $247
17 Hawaii $34,100 1.89% 0.68% $255
18 Colorado $10,000 2.18% 0.56% $268
19 New Mexico $20,800 1.43% 0.74% $273
20 Missouri $13,000 2.14% 0.67% $278
21 North Carolina $19,700 1.51% 0.64% $281
22 District of Columbia $9,000 2.49% 0.38% $282
23 Florida $7,000 3.68% 0.76% $287
24 Tennessee $9,000 3.25% 0.70% $287
25 Nevada $27,000 1.25% 0.71% $290
26 Alabama $8,000 2.39% 0.60% $291
27 Texas $9,000 2.81% 0.63% $295
28 Nebrasa $9,000 3.23% 0.87% $313
29 Ohio $9,000 2.92% 0.64% $316
30 Illinois $12,520 2.39% 0.69% $320
31 Kansas $8,000 4.02% 0.94% $320
32 Kentucky $8,000 3.60% 0.88% $329
33 Maine $12,000 2.68% 0.96% $331
34 Vermont $10,000 3.52% 0.86% $334
35 Arkansas $12,000 3.03% 0.96% $335
36 Montana $26,000 1.93% 1.18% $335
37 West Virginia $12,000 2.97% 0.93% $337
38 Minnesota $27,000 1.64% 0.78% $359
39 Wisconsin $12,000 3.65% 1.12% $435
40 Maryland $8,500 4.79% 0.86% $442
41 California $7,000 4.96% 0.86% $444
42 New York $8,500 4.58% 0.74% $458
43 Iowa $24,500 2.43% 1.28% $470
44 Wyoming $22,800 2.31% 1.10% $477
45 Pennsylvania $8,000 5.78% 1.17% $529
46 Michigan $9,000 5.30% 1.21% $535
47 Rhode Island $19,000 3.74% 1.37% $576
48 Connecticut $15,000 3.76% 0.96% $583
49 New Jersey $29,700 2.41% 1.05% $589
50 Washington $36,800 2.17% 1.26% $602
51 Idaho $33,300 2.82% 1.92% $647
52 Oregon $32,100 2.71% 1.66% $660
53 Massachusetts $14,000 4.89% 1.26% $695
  1. states ranked by average cost, low to high
  2. cost per employee = total taxes for the state divided by total number of workers
data from DOL