Index Component
Michigan — Unemployment Insurance Taxes
#27 on Unemployment Insurance Taxes out of 50 states
Score 5.10 / 10 · up 1 place from 2026
11.6% of the total Index score
Michigan ranks 27th for unemployment insurance taxes on the 2027 State Tax Competitiveness Index.
Michigan on Unemployment Insurance Taxes across the States
#27 on Unemployment Insurance TaxesThe row places the states on a 0 to 10 score scale for Unemployment Insurance Taxes. Michigan is the large outlined dot, and the dashed line is the 50-state median, so a dot to its right scores better than the typical state. Hover over or tab to any dot for detail, and select it to open that state's Unemployment Insurance Taxes page.
Unemployment Insurance Taxes
#27 5.10
- Michigan
- Other states, by rank (1st to 50th)
- 50-state median
Unemployment Insurance Taxes Ranking Changes, 2020–2027
#27 in 2027 · down 5 places from 2020Michigan ranked 22nd on Unemployment Insurance Taxes in 2020 and ranks 27th in 2027, a decline of 5 places. The axis is zoomed to the state's range. Ranks for 2020 through 2026 are backcast under the current methodology.
Ranks and Scores on Unemployment Insurance Taxes
Every state's rank and score on Unemployment Insurance Taxes in 2026 and 2027, with the change in rank, and its overall rank. A rank of 1 is best. The District of Columbia's ranks carry an asterisk because they do not affect the states' ranks, and DC stays at the bottom of the table.
See the Unemployment Insurance Taxes Map for All States
| State | 2026 Rank | 2026 Score | 2027 Rank | 2027 Score | Rank Change | Overall Rank |
|---|---|---|---|---|---|---|
 Arizona | 1 | 6.19 | 1 | 6.19 | No change since 2026 | 17 |
 Delaware | 2 | 6.17 | 2 | 6.14 | No change since 2026 | 22 |
 Oklahoma | 5 | 5.79 | 3 | 6.07 | Up 2 places since 2026 | 15 |
 Nebraska | 3 | 6.06 | 4 | 6.03 | Down 1 place since 2026 | 16 |
 Kansas | 4 | 5.91 | 5 | 5.89 | Down 1 place since 2026 | 19 |
 North Carolina | 6 | 5.74 | 6 | 5.76 | No change since 2026 | 11 |
 Missouri | 8 | 5.72 | 7 | 5.75 | Up 1 place since 2026 | 9 |
 Louisiana | 9 | 5.71 | 8 | 5.75 | Up 1 place since 2026 | 23 |
 Florida | 7 | 5.73 | 9 | 5.73 | Down 2 places since 2026 | 4 |
 Arkansas | 10 | 5.71 | 10 | 5.70 | No change since 2026 | 32 |
 Mississippi | 13 | 5.64 | 11 | 5.64 | Up 2 places since 2026 | 27 |
 Vermont | 12 | 5.66 | 12 | 5.63 | No change since 2026 | 42 |
 North Dakota | 14 | 5.60 | 13 | 5.59 | Up 1 place since 2026 | 12 |
 Indiana | 15 | 5.48 | 14 | 5.51 | Up 1 place since 2026 | 14 |
 Ohio | 11 | 5.67 | 15 | 5.49 | Down 4 places since 2026 | 36 |
 Tennessee | 16 | 5.46 | 16 | 5.47 | No change since 2026 | 8 |
 New Mexico | 17 | 5.38 | 17 | 5.35 | No change since 2026 | 28 |
 Alabama | 19 | 5.32 | 18 | 5.33 | Up 1 place since 2026 | 35 |
 South Dakota | 20 | 5.32 | 19 | 5.32 | Up 1 place since 2026 | 2 |
 Georgia | 22 | 5.24 | 20 | 5.25 | Up 2 places since 2026 | 24 |
 Maine | 21 | 5.29 | 21 | 5.25 | No change since 2026 | 40 |
 Maryland | 18 | 5.38 | 22 | 5.22 | Down 4 places since 2026 | 44 |
 West Virginia | 24 | 5.19 | 23 | 5.19 | Up 1 place since 2026 | 29 |
 California | 26 | 5.13 | 24 | 5.14 | Up 2 places since 2026 | 49 |
 New Hampshire | 23 | 5.19 | 25 | 5.12 | Down 2 places since 2026 | 6 |
 South Carolina | 27 | 5.12 | 26 | 5.12 | Up 1 place since 2026 | 34 |
| Michigan | 28 | 5.12 | 27 | 5.10 | Up 1 place since 2026 | 25 |
 Montana | 25 | 5.13 | 28 | 5.09 | Down 3 places since 2026 | 7 |
 Utah | 29 | 5.02 | 29 | 5.06 | No change since 2026 | 10 |
 Iowa | 35 | 4.61 | 30 | 4.94 | Up 5 places since 2026 | 18 |
 Texas | 30 | 4.83 | 31 | 4.83 | Down 1 place since 2026 | 5 |
 Wisconsin | 31 | 4.78 | 32 | 4.81 | Down 1 place since 2026 | 20 |
 Wyoming | 33 | 4.67 | 33 | 4.77 | No change since 2026 | 1 |
 Kentucky | 32 | 4.72 | 34 | 4.70 | Down 2 places since 2026 | 26 |
 Pennsylvania | 34 | 4.61 | 35 | 4.63 | Down 1 place since 2026 | 30 |
 Virginia | 37 | 4.57 | 36 | 4.56 | Up 1 place since 2026 | 31 |
 Idaho | 36 | 4.59 | 37 | 4.51 | Down 1 place since 2026 | 13 |
 Connecticut | 39 | 4.50 | 38 | 4.48 | Up 1 place since 2026 | 46 |
 Hawaii | 43 | 4.16 | 39 | 4.43 | Up 4 places since 2026 | 43 |
 Colorado | 40 | 4.31 | 40 | 4.34 | No change since 2026 | 33 |
 New York | 38 | 4.52 | 41 | 4.31 | Down 3 places since 2026 | 50 |
 Illinois | 42 | 4.25 | 42 | 4.24 | No change since 2026 | 38 |
 Oregon | 41 | 4.28 | 43 | 4.17 | Down 2 places since 2026 | 37 |
 Minnesota | 44 | 4.06 | 44 | 4.11 | No change since 2026 | 41 |
 New Jersey | 46 | 3.84 | 45 | 3.87 | Up 1 place since 2026 | 48 |
 Massachusetts | 45 | 3.86 | 46 | 3.78 | Down 1 place since 2026 | 45 |
 Nevada | 47 | 3.77 | 47 | 3.77 | No change since 2026 | 21 |
 Rhode Island | 48 | 3.74 | 48 | 3.72 | No change since 2026 | 39 |
 Washington | 49 | 3.68 | 49 | 3.59 | No change since 2026 | 47 |
 Alaska | 50 | 3.54 | 50 | 3.54 | No change since 2026 | 3 |
 District of Columbia | 24* | 5.19 | 24* | 5.17 | — | 47* |
*DC's rank does not affect the states' ranks.
Michigan and Its Neighbors on Unemployment Insurance Taxes
#27 on Unemployment Insurance TaxesMichigan borders 3 states and ranks 27th on Unemployment Insurance Taxes; 2 of them rank higher and 1 ranks lower.
What's in This Component
The unemployment insurance tax component measures the impact of state UI tax attributes, from rate schedules to charging methods, on businesses.
Each component is built from two equally weighted parts, called subindices: one measures the tax rates and the other the tax base, meaning what the tax applies to. Each subindex is made up of one or more variables.
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Rate Subindex
The subindex includes three factors: the actual rate schedules in effect in the most recent year, the statutory rate schedules that can potentially be implemented at any time depending on the state of the economy and the UI fund, and the UI trust fund solvency level.
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Base Subindex
The UI base subindex scores states on how they determine which businesses should pay the UI tax and how much, as well as other UI-related taxes for which businesses may also be liable. It covers the experience rating formula, charging methods and benefits excluded from charging, and smaller elements such as solvency taxes, taxes for socialized costs, reserve taxes, and voluntary contributions.
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What This Component Includes
The variables behind it, grouped as in the report's tables:
- UI Tax Rates
- Experience Formulas and Charging Methods
- Other UI Base Variables
How the Score Is Built
Each part is scored from 0 to 10, with 10 the most competitive. Rank is among the 50 states.
| Part | Score | Rank |
|---|---|---|
| Minimum rate on the taxable wage base | 9.89 | 11 |
| Maximum rate on the taxable wage base | 8.24 | 28 |
| Average rate on the taxable wage base | 7.93 | 29 |
| Average tax on total wages | 6.49 | 32 |
| Actual rates | 8.14 | 27 |
| Most favorable schedule maximum rate | 8.30 | 31 |
| Least favorable schedule maximum rate | 9.32 | 20 |
| Potential rates | 8.81 | 27 |
| Rate Subindex | 7.05 | 26 |
| Experience rating formula | 2.50 | 31 |
| Benefit charging method | 9.17 | 6 |
| Surtaxes and other rules | 6.25 | 16 |
| Base Subindex | 5.97 | 27 |
| Unemployment Insurance Taxes Score | 6.51 | 27 |
Tax Data Explorer
Every unemployment insurance taxes variable behind Michigan's 2027 scores, grouped by the report's tables, as of July 1, 2026. Its bordering states are shown alongside to start. Search the variables and values, or add up to 4 states to compare side by side.
27 data points · Shaded values differ from Michigan
UI Tax Rates
| Variable | Michigan | Indiana | Ohio | Wisconsin |
|---|---|---|---|---|
| Minimum Rate | 0.06% | 0.50% (differs) | 0.55% (differs) | 0.00% (differs) |
| Maximum Rate | 12.20% | 7.40% (differs) | 10.25% (differs) | 12.00% (differs) |
| Taxable Wage Base | $9,500 | $9,500 | $9,000 (differs) | $14,000 (differs) |
| Most Favorable Schedule: Minimum Rate | 0.00% | 0.00% | 0.00% | 0.00% |
| Most Favorable Schedule: Maximum Rate | 6.30% | 5.40% (differs) | 6.30% | 10.70% (differs) |
| Least Favorable Schedule: Minimum Rate | 0.00% | 0.75% (differs) | 0.30% (differs) | 0.07% (differs) |
| Least Favorable Schedule: Maximum Rate | 6.30% | 10.20% (differs) | 6.70% (differs) | 10.70% (differs) |
| Employer Contributions as a Share of Total Wages | 0.47% | 0.25% (differs) | 0.42% (differs) | 0.37% (differs) |
| Employer Contributions as a Share of Taxable Wages | 2.75% | 1.32% (differs) | 2.44% (differs) | 1.50% (differs) |
| Trust Fund Solvency Ratio | 0.5 | 0.77 (differs) | 0.43 (differs) | 0.79 (differs) |
| New Employer Rate | 2.70% | 2.50% (differs) | 2.70% | 3.25% (differs) |
Experience Formulas and Charging Methods
| Variable | Michigan | Indiana | Ohio | Wisconsin |
|---|---|---|---|---|
| Experience Formula Based On | Benefits Ratio | Reserve Ratio (differs) | Reserve Ratio (differs) | Reserve Ratio (differs) |
| Benefits Charged in Proportion to Base-Period Wages | Yes | No (base-period employers in inverse chronological order) (differs) | Yes | Yes |
| Charged If Employee's Benefit Award Is Reversed | Yes | No (differs) | No (differs) | Yes |
| Charged for Reimbursements on Combined Wage Claims | No | No | No | No |
| Charged If Employee Left Voluntarily | No | No | No | No |
| Charged If Employee Was Discharged for Misconduct | No | No | No | No |
| Charged If Employee Refused Suitable Work | No | Yes (differs) | No | No |
| Charged If Employee Continues to Work Part-Time | No | No | No | Yes (differs) |
Other UI Base Variables
| Variable | Michigan | Indiana | Ohio | Wisconsin |
|---|---|---|---|---|
| Solvency Tax | Yes | No (differs) | Yes | Yes |
| Taxes for Socialized Costs or Negative Balance Employers | Yes | No (differs) | Yes | No (differs) |
| Loan and Interest Repayment Surtaxes | Yes | Yes | No (differs) | Yes |
| Reserve Taxes | No | No | No | No |
| Surtaxes for UI Administration or Non-UI Purposes | No | No | Yes (differs) | Yes (differs) |
| Temporary Disability Insurance | No | No | No | No |
| Voluntary Contributions | Yes | Yes | Yes | Yes |
| Years to Qualify for Experience Rating | 1 | 3 (differs) | 1.5 (differs) | 3 (differs) |
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About the Authors
Janelle Fritts is a Senior Policy Analyst with the Tax Foundation’s Center for State Tax Policy. She is the lead researcher on the annual State Tax Competitiveness Index and serves as a resource to policymakers in their efforts to modernize and improve the structures of their state tax codes. Her work has been cited in The New York Times, the Associated Press, Bloomberg, and numerous state media outlets across the country.
Jared Walczak is a Senior Fellow at the Tax Foundation, where he spent five years as Vice President of State Projects, and president of Walczak Policy Consulting.
Nicole Fox is a Policy Analyst with the Center for State Tax Policy at the Tax Foundation, where she serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
Katherine Loughead is the Vice President of State Tax Policy at the Tax Foundation, where she oversees the state tax policy team’s research agenda and serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
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