Governor Kim Reynolds announced September 2, 2026, that Iowa employers will use Tax Table D for 2027, extending the state’s lowest possible UI tax rates for a fifth consecutive year. The annual decision holds the lowest table in place.
The schedule sets experienced-employer rates from 0% to 5.4%. New businesses have separate rates based on whether they operate in construction.
Iowa Workforce Development linked the outcome to its annual review of the Unemployment Insurance Trust Fund and the fund’s continued strength. As of August 15, 2026, its balance stood at over $2.1 billion, enough to avoid moving to a higher table, the state said.
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The agency returned to the announcement in a September 17 update, connecting the rate decision to historically low unemployment claims. Kurt K. Stoebe, Commissioner of the Iowa Workforce Development, said the claims helped build the fund balance and preserve the 2027 rates.
“Meanwhile, Iowa’s historically low level of unemployment claims has led to a $2.1 billion balance in the trust fund and allowed us to maintain the lowest possible tax rates for employers in 2027.”
Employers will pay different rates depending on their status
The table distinguishes employers with an established experience record from new employers. The rates do not all match.
| Employer category | 2027 rate under the state schedule |
|---|---|
| Experienced employers | 0% to 5.4% |
| New nonconstruction employers | 1% |
| New construction employers | 5.4% |
Those fixed entry rates give new businesses a separate starting point, while experienced employers fall within a range. Iowa employers can use the 2027 schedule to plan unemployment insurance contributions; the applicable rate depends on the employer’s category.
The state said businesses already paying into its unemployment insurance system should not expect a higher table for 2027, unless conditions change. The decision applies to Iowa employers and does not itself establish rates beyond that year.
A 2025 law cut the cap and taxable wage base
The table decision follows legislation Reynolds signed in 2025. The law lowered the maximum employer unemployment insurance tax rate to 5.4% and cut the taxable wage base in half.
The change also simplified the tax system, according to the state’s announcement. The new maximum matches the federal-law minimum of 5.4%, while the wage-base reduction changes the amount of wages subject to the state contribution calculation.
That statutory cap sits at the top of the experienced-employer range and is also the rate assigned to new construction employers. The new nonconstruction rate remains 1%.
The rate schedule combines those law changes with the state’s annual review of the fund. It is the review, rather than the five-year streak alone, that determines whether Iowa can retain the lowest table for another year.
The annual review will determine whether the table changes later
Iowa’s announcement presents the 2027 result as the product of strong fund reserves and low claims. The September 17 update repeated that connection.
The state’s announcement gives employers a basis for 2027 budgeting, but the decision applies to that year’s schedule. Businesses should use the rate category that matches their status and account for the 2025 cap and wage-base change when estimating contributions.
The annual review remains the mechanism for setting the table. Iowa’s current decision keeps the lowest schedule in effect through 2027; future conditions could alter the rate table in a later year.
