Alaska Employment Security Tax: Rates, Filing, and Deadlines

The Alaska employment security tax funds the state’s unemployment insurance system, and in 2026 employers pay between 1.00% and 5.40% on the first $54,200 of each worker’s wages while withholding an additional 0.50% from employees. New employers without an experience rating pay 1.50%.¹ Alaska is one of only three states that requires employees to contribute alongside employers, which changes how payroll must be set up here. Reports and payments are due quarterly.

Who Has to Pay

The coverage threshold is low. Under AS 23.20.520, any business with one or more individuals in employment for any portion of a day during the calendar year is a covered employer.² Nonprofits and government entities are covered too, though certain agricultural and domestic service roles may qualify for limited exemptions. Employers who elect coverage voluntarily are bound by their election.

New employers register through the Alaska Employer Registration form with the Department of Labor and Workforce Development. The form asks for your federal EIN, legal structure, the date wages were first paid, and a description of your business activities. Report the actual first-wages date. Backdating forward invites a retroactive assessment when the state catches the discrepancy.

2026 Rates and the Taxable Wage Base

Only the first $54,200 paid to each employee during the calendar year is taxable.³ Wages above that threshold are exempt from both the employer contribution and the employee withholding. The state recalculates this figure annually using 75% of Alaska’s average annual wage for the 12 months ending June 30, rounded to the nearest $100.⁴ Because Alaska wages run high, the state base sits well above the $7,000 federal floor.

Employer rates run 1.00% to 5.40% for 2026, set individually based on each employer’s experience rating.³ Employers new enough to lack a rating pay 1.50%.¹ The employee contribution is a flat 0.50% of wages up to the same $54,200 base, applied uniformly across all covered workers.

How Your Employer Rate Moves Year to Year

Once you have enough claims history, the state assigns an experience rating that adjusts your rate. More claims from your former workers push the rate up; steady employment with few claims moves it toward the 1.00% floor. The Department of Labor and Workforce Development sends a rate notice before each calendar year showing the assigned rate for the coming year. Read it when it arrives. Benefit charges do get assigned in error, and you can request a review if you believe a former employee’s claim was charged to your account incorrectly.

Withholding the Employee Share

This is the piece that catches out-of-state employers. Each pay period, you deduct 0.50% from every covered employee’s wages and hold that money in trust until you deposit it with the state.⁵ The statute is explicit that withheld amounts are not your money. They cannot be garnished, attached, or treated as employer assets in bankruptcy.

If you fail to withhold, you cannot recover the shortfall from the worker afterward. You become personally liable for the full amount that should have been deducted, and the state collects it the same way it collects your own contributions.⁵ Configure payroll for the Alaska employee UI deduction from the first check. Catching this after a year of missed withholdings is expensive.

Quarterly Reporting

Every covered employer files a Quarterly Contribution Report (Form TQ01C). For each worker you list the Social Security number, full legal name, reportable wages for the quarter, an occupational title or code, and a geographic code for the work location. At the employer level, the form captures total reportable wages, excess wages above the taxable base, taxable wages, and the calculated employer and employee contributions.⁶ For each month in the quarter, you also report a worker count for the payroll period that includes the 12th of that month.

Deadlines and How to Pay

Reports and contributions are due by the last day of the month following each calendar quarter.⁷

First quarter (January–March): due April 30
Second quarter (April–June): due July 31
Third quarter (July–September): due October 31
Fourth quarter (October–December): due January 31

You can file and pay through the state’s myAlaska online portal, which processes immediately and gives you a digital receipt. Electronic Funds Transfer and paper checks are also accepted; a mailed check has to be postmarked on or before the deadline to count as timely.

Penalties and Interest for Late Filing

A late report earns a penalty of 5% of the contributions owed if it arrives within 30 days of the due date. Each additional 30-day period adds another 5%, capped at 25% of contributions due. The minimum is $10 per reporting period regardless of amount. The department may waive the penalty if you can show reasonable cause.⁸

Unpaid contributions accrue interest at 12% per year on outstanding balances.⁹ That compounds quickly across multiple quarters. If you know you’ll miss a deadline, file the report on time even if you can’t pay in full. The penalty structure punishes unfiled reports harder than unpaid balances.

The Reimbursable Option for Nonprofits and Government Entities

Organizations that qualify under Section 501(c)(3) of the Internal Revenue Code, along with state and political subdivisions, can elect to skip standard contributions and instead reimburse the state dollar-for-dollar for actual unemployment benefits paid to their former employees.¹⁰ The election has to be filed in writing at least 30 days before the start of the taxable year, and once elected it locks in for a minimum of two taxable years before you can switch back.

Whether the reimbursable method saves money depends on turnover. Low-turnover organizations with few claims often pay less than they would in contributions. Organizations with seasonal staff or frequent layoffs can pay more, because one large claim erases years of savings. Comparing three years of actual claims against what you would have paid in contributions gives a reasonable read on which method fits.

Reimbursable employers still file quarterly reports, but the late-filing penalty is calculated differently: one-tenth of one percent of total quarterly wages for the first 30-day period, capped at one-half of one percent.⁸

Buying a Business or Transferring Operations

A buyer does not automatically start fresh on the rate. When one employer acquires another’s trade, business, or workforce and the two share substantially common ownership, management, or control at the time of transfer, the unemployment experience attributable to the transferred operations follows the business to the buyer, and both parties’ rates are recalculated immediately as of the transfer date.¹¹

The state also watches for rate manipulation. If someone acquires a business primarily to get a lower contribution rate, the department blocks the experience transfer and assigns the new employer rate instead. Penalties for knowingly gaming the rate are severe: assignment of the highest available tax rate for the year of the violation and the next three years. If the employer is already at the highest rate, three additional years at the maximum apply, plus a cash penalty of 2% of taxable wages for each of those years. An advisor who counsels an employer to manipulate rates faces a civil penalty of up to $5,000.¹¹

1
Alaska Department of Labor and Workforce Development. Employment Security Tax FAQ
2
FindLaw. Alaska Code 23.20.520 – Definitions
3
Alaska Department of Labor and Workforce Development. 2026 Unemployment Insurance Tax Rates
4
FindLaw. Alaska Code 23.20.175 – Wages
5
Justia. Alaska Code 23.20.165 – Payment of Contributions
6
Alaska Department of Labor and Workforce Development. Alaska Quarterly Contribution Report
7
eLaws. 8 AAC 85.030 – Contributions and Payment
8
Justia. Alaska Code 23.20.190 – Penalty for Failure to File Reports
9
Alaska Department of Labor and Workforce Development. Employment Security Tax Handbook
10
Justia. Alaska Code 23.20.276 – Financing Benefits for Nonprofit Organizations and for State and Political Subdivisions
11
Justia. Alaska Code 23.20.297 – Special Standards Addressing Transfer of Experience and Assignment of Rates