In the United States, every state sets its unemployment insurance rates specific to factors like how many citizens of that state are unemployed, the set taxable wage base and other factors. Within each state, different employers may be paying different unemployment insurance rates based on how well they track unemployment claims and win protests.

States can differ on parameters such as how many weeks an employee receives benefits, or how much an employee receives every week. Both of these factors contribute to differing unemployment insurance rates state-by-state. For instance, a state that pays fewer weeks of benefits needs fewer tax dollars from employers to cover the cost of unemployment.

In Alabama, the unemployment tax rate ranges from just .65 percent up to 6.8 percent. The Alabama Department of Labor determines this rate for each employer. It’s possible for employers to help lower this rate statewide by helping reduce the amount of unemployment compensation overpayment in Alabama, which currently totals nearly $14 million.

Alabama encourages all employers to help stop overpayment by filing and paying taxes on time, quickly reporting new hires, responding fast to requests for information from the Department of Labor and providing accurate information about employee terminations. By complying promptly and accurately with Alabama unemployment compensation regulations, employers can avoid higher taxes, fines or other penalties.

Lowering the amount of unemployment in the state can also lower the unemployment insurance tax rate. As of September 2016, Alabama’s unemployment rate is 5.4 percent. By keeping more people working, and therefore not claiming unemployment benefits, employers will see lower unemployment insurance rates.

Unemployment Tracker helps employers from every state lower their unemployment insurance costs through accurate tracking of benefits and payments and helping support accurate reporting. For more information on how unemployment insurance differs in each state, please visit our interactive Unemployment Insurance US Map.