Iowa businesses are expected to pay about $104 million less in unemployment insurance taxes next year with a change in the tables that guide how much must be paid, according to the Iowa Workforce Development Office.
It’s the third year companies saved money, the agency said, with Iowa employers saving a total of about $500 million over that time.
The tax reductions are due to improvements in the state and national economy. Iowa’s unemployment rate has dropped to 4.8 percent in July from 5.5 percent in July 2012.
Iowa employers contribute to the state Unemployment Insurance Trust Fund to cover benefits that go to workers who lose their jobs and qualify for assistance. Unemployment tax rates are based on wages and recent unemployment benefit payments, the state said.
Teresa Wahlert, the agency’s director, said Iowa has one of the lowest unemployment insurance rates in the nation. And the savings provides money that companies can invest in growing their business, she said.
Under state law, the amount paid into a trust fund must be calculated each year to ensure benefits are available for workers.
The average rate will fall from 2 percent this year to 1.6 percent next year, the state said. Employers will move from tax table five to table six.