Payroll taxes
What is Taxable wage base?
A taxable wage base is the maximum amount of an employee's annual wages that a given payroll tax applies to. Once a worker's year-to-date pay passes the base, the employer owes no more of that tax for the rest of the year. Different taxes have different bases: FUTA uses $7,000, Social Security uses $176,100 in 2026, and each state sets its own base for unemployment tax.
The wage base matters as much as the rate. A low rate on a high base can cost more than a high rate on a low base, which is why comparing states on rate alone is misleading.
Example
Idaho's 1% unemployment rate looks cheap, but its $55,300 wage base pushes the cost to $553 per worker, more than a 2.7% rate on a $9,000 base ($243).