All Roll Calls
Yes: 92 • No: 43
IowaSF 60791st General Assembly (2025–2026)Senate
A bill for an act relating to unemployment insurance taxes on employers. (Formerly SF 504, SSB 1173.) Effective date: 07/01/2025.
Sponsored By: COMMITTEE ON WAYS AND MEANS
Signed by Governor
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 0 costs, 2 mixed.
Lower Employer Tax Base, Restricted Savings
Beginning July 1, 2025, Iowa lowers the wage base used to calculate employers' unemployment taxes. The state formula drops from 66⅔% to 33⅓% of the applicable statewide average weekly wage, multiplied by 52. That amount is rounded up to the next $100, and the federal unemployment taxable-wage amount remains the minimum. The rule covers taxable Iowa wages paid by an employer or its predecessor. Employers must use any savings from this law for employee salaries, benefits, or payments replacing unemployment benefits during seasonal unemployment.
New Unemployment Tax Rates for Employers
Beginning July 1, 2025, Iowa uses nine employer tax ranks and four rate categories tied to unemployment fund reserves. Reserve ratios of 0.50 or less use category A; above 0.50 through 0.90, B; above 0.90 through 1.30, C; and above 1.30, D. Rates by rank, listed in A/B/C/D order, are: rank 1, 0%/0%/0%/0%; rank 2, 0.40%/0.30%/0.10%/0.10%; rank 3, 1.20%/0.80%/0.40%/0.20%; rank 4, 2.10%/1.40%/0.60%/0.30%; rank 5, 3.60%/2.40%/1.10%/0.50%; rank 6, 5.40%/4.10%/1.90%/0.90%; rank 7, 5.40%/5.40%/4.20%/2.00%; rank 8, 5.40%/5.40%/5.40%/2.80%; and rank 9, 5.40% in every category. Employers with lower benefit ratios receive lower ranks; ranks 1–6 each cover about 14.29% of taxable wages, and ranks 7–9 each cover about 4.76%. Equal benefit ratios share a rank, and employers qualifying for multiple ranks receive the lower rate. Newly covered nonconstruction employers pay rank 4 rates, with a 1% minimum; newly covered construction and landscaping employers pay 5.40%. These starting rates last through the calendar year when the employer's account has been chargeable with benefits for 12 consecutive quarters immediately before the calculation date. The reserve calculation removes a $150 million addition and divides available benefit funds by covered wages, excluding reimbursable wages, from the first four of the five preceding calendar quarters. Iowa uses the August 15 fund balance if it exceeds the balance on the calculation date.
Sponsors & Cosponsors
Sponsor
COMMITTEE ON WAYS AND MEANS
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 5/14/2025
Passed Senate
Yes: 32 • No: 16
House vote • 5/14/2025
Passed House
Yes: 60 • No: 27
Actions Timeline
Explanations of votes.
6/27/2025HouseFiscal note.
6/6/2025legislatureSigned by Governor.
6/5/2025SenateReported correctly enrolled, signed by President and Speaker, and sent to Governor.
5/23/2025SenateExplanation of vote.
5/20/2025HouseMessage from House.
5/14/2025SenateImmediate message.
5/14/2025HousePassed House, yeas 60, nays 27.
5/14/2025HouseSubstituted for HF 980.
5/14/2025HouseRead first time, passed on file.
5/14/2025HouseFiscal note.
5/14/2025legislatureMessage from Senate.
5/14/2025HouseImmediate message.
5/14/2025SenatePassed Senate, yeas 32, nays 16.
5/14/2025SenateAmendment S-3186 filed, lost.
5/14/2025SenateAmendment S-3185 filed, lost.
5/14/2025SenateAmendment S-3184 filed, lost.
5/14/2025SenateAmendment S-3181 filed, adopted.
5/14/2025SenateFiscal note.
3/25/2025legislatureCommittee report, approving bill.
3/12/2025SenateIntroduced, placed on Ways and Means calendar.
3/12/2025Senate
Bill Text
As Introduced
Enrolled
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