What SUI rate applies to new employers in Connecticut, and on how much of each worker's wages?

New employers in Connecticut pay state unemployment insurance at 2.2% on the first $26,100 of each employee's wages per year — a maximum SUI liability of $574.20 per W-2 worker annually before experience-rating adjustments kick in.

Does Connecticut tax employee wages at the state level?

Yes. Connecticut imposes a state income tax on wages, which means employers must withhold Connecticut income tax from each paycheck and remit it to the Department of Revenue Services. There is no payroll-tax-free treatment of wages at the state level.

What happens if Connecticut finds a worker was misclassified as an independent contractor?

Connecticut applies the ABC test to determine whether a worker is an employee. Misclassifying an employee as a 1099 contractor exposes the employer to penalties of up to $300 per day per misclassified worker under Connecticut wage statutes, plus back taxes, interest, and potential civil liability.

CT · Payroll tax 2026

The true cost of hiring in Connecticut

What a W-2 employee actually costs an employer in Connecticut— and how that compares to a 1099 contractor — with the state's real 2026 unemployment-insurance rates built in.

Connecticut's economy runs on financial services, insurance, and bioscience — with Hartford anchoring insurance carriers and Stamford hosting major asset managers and hedge funds. That mix means employers routinely bring on knowledge workers where contractor vs. W-2 status draws real scrutiny. For a new employer hiring a W-2 worker in Connecticut, the state unemployment insurance (SUI) obligation starts at 2.2% on the first $26,100 of each employee's wages, adding up to $574.20 per worker in SUI alone before any federal payroll taxes apply. Connecticut also imposes a state income tax on wages, so employers must withhold and remit state income tax on top of federal obligations. Additionally, Connecticut's Paid Family and Medical Leave program carries a 0.5% employee-paid contribution that employers are required to administer and remit — adding a compliance step even though the cost sits on the employee side. Between SUI, federal FICA, and PFML administration, the gap between an offer letter and the true cost of a Connecticut hire is measurable and worth calculating before the offer goes out.

Estimate a Connecticut hire

Pre-filled with Connecticut's 2.2% new-employer SUI rate. Adjust salary, benefits, and the 1099 rate to fit your hire.

Fully-loaded W-2 costConnecticut

$99,654/yr

1.33× base salary$47.91/hr$24,654 over base

W-2 employee

$99,654

1099 contractor

$75,000

W-2 costs $24,654 more (32.9%) than this contract. Breakeven rate: $99,654.

Annual salary

State

Health insurance/mo

401(k) match

Overhead

1099 contract/yr

New-employer rates · IRS Pub 15CT details

Connecticut employer tax facts

Connecticut employer payroll-tax rates for 2026
Item	CT	Context
New-employer SUI rate	2.2%	+0.13% vs national avg 2.07%
SUI taxable wage base	$26,100	national avg $22,573
Federal FICA (employer)	7.65%	6.2% SS + 1.45% Medicare
FUTA	0.6%	max $42 per employee/yr
State income tax on wages	Yes
Worker classification test	ABC test

Source: IRS Pub 15 · Connecticut unemployment agency · Updated 2026-06-01

Extra employer taxes: PFML 0.5% employee-paid; employer administers.

Example: a $75,000 hire in Connecticut

At a $75,000 base salary with typical benefits, a W-2 employee in Connecticut costs an employer $99,654 per year — $24,654 above base pay. An equivalent 1099 contract at $75,000 would cost $24,654 less; the breakeven contract rate is $99,654.

Misclassification risk in Connecticut

Test: ABC test

ABC test; up to $300/day penalty under CT wage statutes.

Penalties by state

Compare nearby rates

Connecticut's 2.2% new-employer SUI rate sits near Massachusetts (2.13%), Wyoming (2.35%), Missouri (2.38%), Arizona (2%). See the full 51-state comparison or the 2026 employer payroll tax reference.

Connecticut hiring-cost FAQ

What SUI rate applies to new employers in Connecticut, and on how much of each worker's wages?: New employers in Connecticut pay state unemployment insurance at 2.2% on the first $26,100 of each employee's wages per year — a maximum SUI liability of $574.20 per W-2 worker annually before experience-rating adjustments kick in.
Does Connecticut tax employee wages at the state level?: Yes. Connecticut imposes a state income tax on wages, which means employers must withhold Connecticut income tax from each paycheck and remit it to the Department of Revenue Services. There is no payroll-tax-free treatment of wages at the state level.
What happens if Connecticut finds a worker was misclassified as an independent contractor?: Connecticut applies the ABC test to determine whether a worker is an employee. Misclassifying an employee as a 1099 contractor exposes the employer to penalties of up to $300 per day per misclassified worker under Connecticut wage statutes, plus back taxes, interest, and potential civil liability.