Montgomery AL –Alabama Department of Labor secretary Fitzgerald Washington announced that the majority of Alabama employers will receive a 54% tax reduction in their 2023 unemployment insurance taxes. The state also dropped to the lowest tax bracket.
Washington stated, “Following economic uncertainty and record-breaking unemployment compensation benefits during the pandemic it is absolutely amazing that we were able to lower taxes and drop to the lowest rate schedule in such a short time.”
Alabama is now in Schedule A for the first time since 1997. Schedule A has the lowest tax rate schedule. The average tax rate for this year is the lowest ever recorded.
Employers will not be responsible for any shared costs this year. This follows several years of collecting shared costs related to the pandemic.
The current Alabama Unemployment Rate Schedule consists four tax rate schedules, A, B, D, and C. These were originally created to help in the recovery benefits costs. This will ensure that the UI Trust Fund from which benefits are paid does not become depleted or collect excessive revenue. It is important to have a sufficient balance in order to pay benefits when needed. The balance of the trust fund will determine which calendar year’s schedule will be in force.
Washington continued, “Low taxes allow businesses to hire additional employees and stimulate spending.” “This record-low tax rate is further evidence that Alabama’s economic recovery has been successful and shows how resilient our state has been.”
“This announcement today shows how Alabama is recovering from the pandemic. In nearly 30 years, our employers have not seen a UI tax schedule at its lowest level – and rates that are among the lowest ever recorded in history. Our economic decisions in this time of economic uncertainty are paying off. They put more money into employers’ pockets and allow them to hire more Alabamians, which benefits the entire state. I am proud to be the leader of an Administration that delivers real, effective tax savings for our people. Governor Kay Ivey
Below is an example of the unemployment insurance tax rates applicable to an average employer:
Online, business owners can download their individual 2023 unemployment tax rate notices.
www.labor.alabama.gov/eGov/lo
gin.aspx
. To see your rate, customers should log in to their eGov accounts.
Employers pay 100% unemployment insurance taxes on the first $8,000 in wages per employee.
Please call 334) 954-4741 if you have questions about a company’s unemployment insurance rate.
*Shared cost are benefit charges that cannot be attributed solely to one employer but are shared by all Alabama employers. Shared costs include business closings and bankruptcies. These shared costs can be split among those employers that are still active.
