Most Alabama employers will see a 54% tax cut in their 2023 unemployment insurance taxes because the state has dropped into the lowest tax rate schedule possible and employers will incur no shared costs this year.
Alabama dropped into the lowest rate schedule (Schedule A) for the first time since 1997. The average tax rate for 2023 is slightly more than a half percent (.55%), the lowest in recorded history. The average rate last year was 1.2%.
Employers pay unemployment insurance taxes on the first $8,000 of wages earned per employee. The tax rate is individual to each business based on a formula that takes into account wages paid; the amount of unemployment among current and former employees; the average duration and cost of unemployment benefits paid to claimants over a three-year period; as well as shared costs, which all employers pay. In 2023, no shared costs will be incurred by Alabama employers, the Alabama Department of Labor said in a statement earlier this month.
Your individual 2023 unemployment insurance rate has been available for download from the Alabama Labor Department website since Dec. 13, 2022.
To see your rate, login to your account at
Once logged in, go to Tax Rate / Advanced Payment Rate Notice. Enter your account number/FEIN when prompted, then click 2023. If you have questions about your rate, call the Alabama Labor Department at (334) 954-4741.
The first quarterly tax payment for 2023 is due May 1 and delinquent May 2. Your tax rate will be the same for all of 2023.