Taxable Wage Base

Q. What is a taxable wage base?

A. Contributing employers covered under the Michigan Employment Security (MES) Act are required to pay unemployment insurance taxes on their employees' wages. The taxable wage base is the amount of an employee's wages that is taxed by the Unemployment Insurance Agency each calendar year and is payable by the employer.

Q. How much is the taxable wage base?

A. The default taxable wage base is set at $9,500. The MES Act provides for a reduced taxable wage base if the UIA Trust Fund balance reaches or exceeds $2.5B for two consecutive calendar quarters.

Q. What is the current taxable wage base?

A. In 2025, the taxable wage base is $9,000 for qualified employers. A qualified employer is one who has completed and submitted all required quarterly tax reports and does not have an unpaid balance of $25 or more in tax, penalty or interest

Q. What does this mean for my business?

A. Contributing employers must pay taxes on the first $9,000 of each employee’s wages in the 2025 calendar year.

Q. How does the taxable wage base affect my organization's unemployment tax liability?

A. Your Michigan tax liability has the potential to decrease over prior years when the taxable wage base was $9,500.

Q. Will the $9,000 taxable wage base be reflected in my tax account when my quarterly reports are filed?

A. Yes. The correct taxable wage base will be reflected in your tax account at the time your quarterly wage/tax reports are filed.

Q. I am a third-party payroll provider; does the change in the taxable wage base mean I may have to make internal programming changes to my system?

A. Yes. You will need to ensure that the applicable taxable wage for 2025 is set at $9,000 to ensure employers pay the correct amount of taxes to avoid any interest accrual due to underpayments.