Colorado Unemployment Tax Rate: Wage Base, Rates, and Surcharges

Colorado employers pay the state unemployment tax on the first $30,600 of each employee’s wages in 2026, at a combined rate that runs from roughly 0.72% at the low end to over 10% at the high end. The Colorado unemployment tax rate you’re assigned depends on your own claims history plus two statewide surcharges, and only employers pay it — taking any portion out of an employee’s paycheck is prohibited. The Colorado Department of Labor and Employment (CDLE) recalculates your rate every year and mails a notice each fall or early winter.

The 2026 Taxable Wage Base

For 2026, unemployment premiums are owed on the first $30,600 paid to each individual employee during the calendar year.¹ Once a worker’s year-to-date gross wages cross that line, you stop owing UI premiums on that person for the rest of the year. The clock resets January 1.

That base has climbed fast. It was $17,000 in 2022, $20,400 in 2023, $23,800 in 2024, and $27,200 in 2025.¹ For lower-wage employees whose full annual pay falls under the cap, the higher base means the entire salary is subject to UI premiums, and your total annual cost per worker is meaningfully larger than it was even a couple of years ago.

How CDLE Calculates Your Rate

Colorado uses experience rating, which ties each employer’s premium rate to its own history of unemployment claims. Businesses whose former employees file more claims pay more; businesses with stable workforces pay less.²

CDLE calculates a “percent of excess” for each account. It takes your total lifetime premiums paid, subtracts total lifetime benefits charged against you, and divides that by your average annual chargeable payroll over the previous three state fiscal years (July through June).² A positive number means you’ve paid in more than has been charged out, and you land on the lower end of the rate schedule. A negative number pushes you up.

Your percent of excess is then placed on a Premium Rate Schedule, which itself shifts based on the statewide reserve ratio — a gauge of how healthy the overall UI trust fund is. For 2026, the reserve ratio of 0.649% places every employer on the 0.006 to 0.008 rate schedule.³ The trust fund’s condition affects every employer, not just those with claims of their own.

What New Employers Pay in 2026

If your business is new to Colorado payroll or hasn’t reported wages long enough for its own experience history, you’re assigned an introductory rate based on your industry. Most employers move to an experience-based rate after roughly one year of reporting, though the exact timing depends on when you became liable relative to the annual computation date.

The 2026 introductory combined rates:⁴

Non-construction, general construction, and trades: 1.53% beginning rate + 0.17% support rate + 1.35% solvency surcharge = 3.05% combined
Heavy construction: 4.28% beginning rate + 0.48% support rate + 1.525% solvency surcharge = 6.285% combined
Political subdivisions (group rate): 0.20% combined, no surcharges

Heavy construction’s higher starting rate reflects the seasonal and cyclical nature of that work, which produces more claims. For a new non-construction employer, the 3.05% combined rate on a $30,600 wage base works out to roughly $934 per employee at the annual maximum.

The Two Surcharges on Every Rate Notice

Your final bill isn’t just your base experience rate. Colorado adds two surcharges as separate line items, and both are in effect for 2026.

Solvency Surcharge

When the UI trust fund balance on June 30 falls to 0.5% or less of total wages reported by experience-rated employers, a solvency surcharge kicks in for every experience-rated employer. It stays in place until the fund recovers to at least 0.7% of reported wages.⁵ The rate is scaled by your percent of excess, from 0.10% for the best-rated employers up to 2.70% for the worst.⁶

Even employers with no recent claims pay it. You cannot protest the solvency surcharge; it’s set by statute, not by anything specific to your account.³

Support Surcharge

The support surcharge funds administrative costs and is also scaled by percent of excess. In 2026 it runs from 0.06% for the best-rated employers to 0.81% for those with the worst claims history.⁶ Like the solvency piece, it cannot be protested, and money paid toward it does not build your experience rating.³

Where to Find Your Rate and When to Pay

Each fall, CDLE issues the Notice of Combined Unemployment Insurance Tax Rate (Form UITR-1) for the coming calendar year. It breaks out your base experience rate, the support surcharge, and the solvency surcharge so you can see how the total was assembled. The notice is available through the MyUI Employer+ portal.

Quarterly wage reports and premium payments are due the last day of the month following each quarter’s end:⁷

Q1 (January–March): April 30
Q2 (April–June): July 31
Q3 (July–September): October 31
Q4 (October–December): January 31

Reports list gross wages paid to every employee for the quarter; the system applies your assigned rate against the $30,600 wage base. Check that the rate loaded in your payroll software matches the UITR-1. Mismatches are one of the most common causes of underpayment notices.

Protesting Your Assigned Rate

If you think CDLE used wrong figures — for example, benefits charged to your account for someone who never worked for you — you can file a rate protest through MyUI Employer+. The protest window is typically 20 calendar days from the mailing date of your rate notice.³ Miss it and you’re locked in for the year.

Your protest has to focus on errors in the benefit charges or payroll figures that fed the experience-rate calculation. The support and solvency surcharges are set by statute and apply uniformly, so those are off-limits.

Penalties for Late Filing or Payment

Colorado assesses a $50 penalty per occurrence for each quarter a wage report is delinquent. New employers get a break during their first four quarters of coverage — $10 per occurrence.⁸

Unpaid premiums draw a separate hit. If your account is delinquent as of the June 30 annual computation date, CDLE assesses a delinquent premium penalty equal to the amount owed or 1% of your taxable payroll, whichever is less, billed across four quarterly installments the following year.⁹

Interest runs at 1.5% per month, or 18% annualized, on past-due premiums and penalties.⁸ Even a modest delinquency compounds fast. CDLE can waive penalties for good cause, but that’s discretionary.

Federal Unemployment Tax Runs Alongside

Colorado UI premiums are only one layer. Every employer also owes federal unemployment tax (FUTA) on the first $7,000 of each employee’s annual wages, reported on IRS Form 940. The gross FUTA rate is 6.0%, but employers who pay their state UI on time get a credit of up to 5.4%, dropping the effective federal rate to 0.6%, or about $42 per employee per year.¹⁰

Form 940 is due January 31 of the following year, with an extra 10 days if all FUTA deposits were made on time.¹¹ Colorado is not currently on the FUTA credit reduction list, so Colorado employers get the full 5.4% credit as long as state premiums are paid when due. Falling behind on state UI can cost you the federal credit and raise your effective FUTA rate substantially.

FAMLI Is a Separate Program

Colorado’s Family and Medical Leave Insurance (FAMLI) program is sometimes confused with UI because both involve payroll-based premiums administered by CDLE. They are separate programs with separate rates, separate trust funds, and separate purposes. FAMLI funds paid leave for serious health conditions, new children, and family caregiving, not job loss. Its premium is capped at 1.2% of wages by statute and is split between employer and employee, unlike UI, which employers pay entirely on their own. If you’re totaling Colorado payroll tax obligations, count them independently.

1
Justia. Colorado Code 8-70-103 – Definitions
2
Colorado Department of Labor & Employment. Experience Rates
3
Colorado Department of Labor & Employment. Premium Rates
4
Colorado Department of Labor & Employment. Introductory Rates
5
Justia. Colorado Code 8-76-102.5 – Rates Effective Upon Fund Solvency – Repeal of Prior Rates – Solvency Surcharge – Definitions
6
Colorado Department of Labor & Employment. Unemployment Insurance Premiums
7
Colorado Department of Labor & Employment. Wage Reporting
8
Colorado Department of Labor & Employment. Interest and Penalties
9
Justia. Colorado Code 8-79-104 – Failure to File
10
Internal Revenue Service. Topic No. 759, Form 940, Employers Annual Federal Unemployment Tax Return
11
Internal Revenue Service. Employment Tax Due Dates