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Good News for Texas Employers: Lowest UI Rate in Years

Good news! The Texas Workforce Commission (TWC) announced a decrease in the average unemployment insurance (UI) tax rate for Texas employers. Last year the average was 1.35 percent. This year it is 1.16 percent – the lowest rate we have seen in years!

The decreased tax rate is largely thanks to a healthy Texas economy – and more Texans working! When fewer individuals are collecting unemployment, there is more money in the UI trust, which means a lower rate for Texas employers.

Meaningful pro-business legislation also helps ensure employers have a healthy business climate, which supports job growth and encourages economic activity. In the last few years, pandemic-related layoffs skyrocketed the state’s unemployment rate, leading to a $7.2 billion deficit in our state’s unemployment insurance trust fund. Governor Greg Abbott issued an executive order to accelerate the delivery of necessary dollars and to help Texans hardest hit by the crisis. His actions ensured a stable UI Trust Fund through the pandemic, and in 2021, the 87th Legislature passed HB 7 and SB 8 to replenish the fund.

TAB appreciates the leadership of Chairwoman Angie Chen Button for authoring HB 7 and then-Senate Finance Chair, Jane Nelson, for her careful allocation of ARAP funds in SB 8. With Governor Greg Abbott’s signature, these measures ultimately spared taxpayers from shelling out an additional $1.2 billion in UI taxes (a 329% tax increase) for each year over the next seven years to cover the $7.2 billion deficit.

Pro-business leaders, and the policies they support, make the Texas business climate hum.

Blog by Katie Zarate, Director of Communications


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