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SF 504IOWASession 2025-2026State BillSigned into law

Enacted

Iowa Senate modifies employer unemployment insurance taxes, rates, and wage definitions

Original title: A bill for an act relating to unemployment insurance taxes on employers.(Formerly SSB 1173 ; See SF 607 .)

Last action · June 27, 2025: Explanations of votes. H.J. 1224 .

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What This Bill Does

Iowa Senate File 504 alters the calculation of for unemployment insurance by reducing the statewide average weekly wage percentage from 66.66 percent to 33.33 percent, revises the contribution rate tables and formulas, and reduces the number of s from 21 to 9. The legislation also establishes a 10 percent surcharge for employers with high 3-year average benefit ratios and recommends that resulting employer savings be applied toward employee compensation or seasonal unemployment reserves.

Why it matters

The measure restructures how business tax burdens are calculated for the state's unemployment fund, modifying baseline taxable wage thresholds and capping the maximum contribution rate at 5.40 percent while introducing targeted surcharges for employers with frequent layoff histories.

Who It Affects

Groups the bill's text affects, as described in the record. Being affected is not a position for or against it.

Directly affected

employers

Employers face revised taxable wage calculations, modified contribution rate tables, updated benefit ratio ranks, and potential surcharges based on their three-year average benefit ratios.

Directly affected

nonconstruction contributory employers

Newly subject nonconstruction contributory employers pay contributions at the rate specified in the fourth benefit ratio rank instead of the twelfth rank.

Directly affected

construction or landscaping contributory employers

Newly subject construction or landscaping contributory employers pay contributions at the rate specified in the twenty-ninth benefit ratio rank instead of the twenty-first rank.

Key Facts

The bill reduces the percentage of the statewide average weekly wage used to determine taxable wages from 66.66 percent to 33.33 percent.
The maximum contribution rate corresponding with the highest benefit ratio rank is reduced from 9.0 percent to 5.40 percent.
The number of benefit ratio ranks used to group employers is reduced from 21 to 9.
The number of possible contribution rate tables is reduced from 8 to 4, shifting from numbered to lettered designations (A, B, C, D).

Show all 9 facts

Newly subject nonconstruction contributory employers pay contributions at the rate specified in the fourth benefit ratio rank (previously the twelfth), but not less than one percent.
Newly subject construction or landscaping contributory employers pay contributions at the rate specified in the twenty-ninth benefit ratio rank (previously the twenty-first).
The current reserve fund ratio calculation is altered to use the preceding year rather than the previous five calendar quarters, removing the requirement to add $150 million on the computation date.
A 10 percent surcharge is established for contributory employers whose average benefit ratio for the previous three fiscal years equals or exceeds 1.250000.
Employer savings resulting from the Act are recommended to be used for employee salaries or benefits, or as an alternative to unemployment benefits during seasonal unemployment.

Frequently Asked Questions

How does the bill change the calculation for taxable wages?

It changes the calculation under paragraph 'a' by reducing the percentage of the statewide average weekly wage used from 66.66 percent to 33.33 percent, which is then multiplied by 52 and rounded to the nearest $100.

What is the new maximum contribution rate for employers under the updated rate tables?

The highest contribution rate corresponding with the highest is set at 5.40 percent, down from 9.0 percent under current law.

Which employers are subject to the new surcharge?

The surcharge applies to contributory employers who are no longer newly subject to chapter 96 and whose average benefit ratio for the previous three fiscal years equals or exceeds 1.25.

What else do you want to know?

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Where This Stands

Current status: Signed into law.

Procedural history

35 actions

Jun 27, 2025House
Explanations of votes. H.J. 1224 .
Jun 6, 2025Iowa Legislature
Fiscal note.
Jun 5, 2025SenateEnrolled
Signed by Governor . S.J. 1052 .
May 23, 2025Senate
Reported correctly enrolled, signed by President and Speaker, and sent to Governor. S.J. 1050 .
May 20, 2025House
Explanation of vote. H.J. 1223 .
May 14, 2025House
Message from House. S.J. 1010 .

Show 29 earlier actions

May 14, 2025House
Immediate message. H.J. 1197 .
May 14, 2025HouseFloor
Passed House , yeas 60, nays 27. H.J. 1197 .
May 14, 2025House
Substituted for HF 980 . H.J. 1196 .
May 14, 2025HouseIntroduced
Read first time, passed on file. H.J. 1183 .
May 14, 2025Iowa Legislature
Fiscal note.
May 14, 2025House
Message from Senate. H.J. 1183 .
May 14, 2025Senate
Immediate message. S.J. 1009 .
May 14, 2025SenateFloor
Passed Senate , yeas 32, nays 16. S.J. 1008 .
May 14, 2025Senate
Amendment S-3186 filed, lost. S.J. 1008 .
May 14, 2025Senate
Amendment S-3185 filed, lost. S.J. 1007 .
May 14, 2025Senate
Amendment S-3184 filed, lost. S.J. 1006 .
May 14, 2025SenateFloor
Amendment S-3181 filed, adopted. S.J. 1006 .
Mar 25, 2025Iowa Legislature
Fiscal note.
Mar 12, 2025Senate
Committee report, approving bill. S.J. 508 .
Mar 12, 2025SenateIntroduced
Introduced, placed on Ways and Means calendar. S.J. 506 .
Mar 12, 2025Senate
Committee report approving bill, renumbered as SF 607 . S.J. 508 .
Mar 11, 2025Iowa Legislature
Subcommittee recommends passage.
Mar 10, 2025Iowa Legislature
Subcommittee Meeting: 03/11/2025 8:30AM Room 217 Conference Room.
Mar 10, 2025Senate
Subcommittee: Dickey, Schultz, and Townsend. S.J. 466 .
Mar 6, 2025SenateCommittee
Referred to Ways and Means. S.J. 427 .
Mar 4, 2025Senate
Committee report, approving bill. S.J. 411 .
Mar 4, 2025SenateIntroduced
Introduced, placed on calendar. S.J. 402 .
Mar 3, 2025Iowa Legislature
Committee report approving bill, renumbered as SF 504 .
Mar 3, 2025Iowa Legislature
Subcommittee recommends amendment and passage.
Feb 24, 2025Senate
Subcommittee Meeting: 02/27/2025 8:30AM Senate Lounge.
Feb 24, 2025Iowa Legislature
Subcommittee: Dickey, Schultz, and Wahls.
Feb 24, 2025Iowa LegislatureIntroduced
Introduced, referred to Workforce.
Jan 30, 2025House
Subcommittee: Kniff McCulla, Cooling and Meggers. H.J. 172 .
Jan 30, 2025HouseIntroduced
Introduced, referred to Labor and Workforce. H.J. 170 .

Version history

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Full breakdown

Who this bill affects and the strongest case for and against it, written only from the bill’s own text.

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