Colorado employers fund the state’s unemployment insurance program by paying quarterly premiums on the first $30,600 of each employee’s wages in 2026. Employees pay nothing toward Colorado state unemployment tax. Total rates for 2026 run from 0.72% for employers with the strongest claims history to 10.85% for those with the weakest, and payments are filed each quarter through the MyUI Employer+ portal.1Colorado Department of Labor & Employment. Premium Rates
Which Employers Have to Pay
Liability starts once a business hits one of the triggers in the Colorado Employment Security Act. For most private employers, that means paying at least $1,500 in wages in any calendar quarter, or employing at least one person for part of a day in 20 different weeks within a calendar year. The 20 weeks don’t have to be consecutive, and they can involve different workers.2Justia. Colorado Code 8-70-113 – Employer – Definition
Once you cross either threshold, you stay liable for the rest of the calendar year and going forward until you formally close the account. Other categories of employer have their own triggers:
- Nonprofits under 501(c)(3) become liable once they employ four or more workers for at least 20 weeks in a calendar year.
- Agricultural employers become liable if they pay $20,000 or more in cash wages during any quarter or employ 10 or more workers for at least 20 weeks.
- Household employers become liable once they pay $1,000 or more in cash wages in a single calendar quarter.
These thresholds are set by statute and don’t adjust for inflation. If you’re not sure whether you qualify, registering when you hire your first employee is safer than discovering the liability later. Back premiums with interest cost far more than premiums paid on time.
The 2026 Taxable Wage Base
Premiums apply only to the first $30,600 of each employee’s gross annual wages in 2026. Anything above that cap is exempt from the tax for the rest of the year. The figure reflects SB 22-234, which phased in wage-base increases starting in 2024. For employees whose pay exceeds the cap early in the year, your per-employee premium obligation drops to zero for the remaining quarters.
How Your Rate Is Built
Your total premium rate is the sum of three parts: a standard premium rate, a support surcharge, and a solvency surcharge when it’s in effect. All three are set by your “percent of excess,” which compares your cumulative premiums paid to the benefits charged against your account, measured against your average payroll.3Justia. Colorado Code 8-76-102.5 – Premium Rates
For 2026, the standard rate runs from 0.56% for employers with the strongest history (percent of excess of +20 or more) to 7.34% for those with the weakest (worse than -25). The support surcharge adds between 0.06% and 0.81% in the same brackets.4Colorado Department of Labor & Employment. Unemployment Insurance Premiums
The solvency surcharge applies when the state’s trust fund reserve ratio falls below its threshold, and it’s in effect for 2026. It adds another 0.10% to 2.70% depending on your bracket.1Colorado Department of Labor & Employment. Premium Rates Added together, the three pieces produce the 0.72% to 10.85% total range. That spread gives businesses a real financial reason to manage layoffs carefully, because every successful unemployment claim charged to your account pushes your rate higher at the next annual recalculation.
New Employer Rates
A newly liable business without an experience history is assigned an introductory rate tied to its industry rather than a single flat number. The “unrated” category in the 2026 tables carries a 1.53% standard premium, 0.17% support surcharge, and 1.35% solvency surcharge, for a total of roughly 3.05%. Your actual introductory rate depends on the industry classification the Division assigns.1Colorado Department of Labor & Employment. Premium Rates
Registering the Business
Once you hit a liability trigger, register with the Division of Unemployment Insurance using the Employer Registration Report (Form UITR-1). The form asks for your Federal Employer Identification Number, your business structure, officer or partner information, and your industry classification. After you register, the Division issues a UI account number and your introductory rate. Update the account promptly when ownership, structure, or address changes to avoid misrouted correspondence and penalties.
Quarterly Filing Deadlines
Wage reports and premium payments are due through MyUI Employer+ on the last day of the month after each quarter closes:5Colorado Department of Labor & Employment. Wage Reporting
- April 30 for January through March wages.
- July 31 for April through June wages.
- October 31 for July through September wages.
- January 31 for October through December wages.
Each report needs the Social Security number, full name, UI gross wages, ownership status, and employment months for every person on payroll during the quarter. Hours worked aren’t required.6Department of Labor & Employment. How To Submit a Wage Report in MyUI Employer+ (for Employers) The portal uses that data to track which employees have already hit the annual cap and computes your premium for the quarter.
Electronic filing is the default. Paper filing requires a non-electronic communications waiver from the Division, and the same rule covers claims correspondence like fact-finding questionnaires and separation requests.7Department of Labor & Employment. Submitting a Wage Report8Colorado Department of Labor & Employment. MyUI Employer+
What Late Filing Costs
Miss a quarterly deadline and two things happen. The Division assesses a flat $50 penalty for each delinquent wage report. Newly liable employers still in their first four quarters pay $10 per occurrence instead.9Colorado Department of Labor & Employment. UI Premiums and Wages FAQ
Unpaid premiums then accrue interest at 1.5% per month, or 18% annually, on any portion of a month the balance remains outstanding.10Justia. Colorado Code 8-79-101 – Interest on Past Due Premiums Interest runs on both the premiums and any accumulated penalties. At 18% a year, a balance left alone for a few quarters compounds quickly.
How Colorado UI Interacts With FUTA
Colorado’s tax doesn’t replace the federal one. Employers owe both. The Federal Unemployment Tax Act imposes a 6.0% tax on the first $7,000 of each employee’s wages, but paying state unemployment taxes on time earns a credit of up to 5.4%, dropping the effective FUTA rate to 0.6%.11U.S. Department of Labor. FUTA Credit Reductions
FUTA is reported annually on IRS Form 940, which asks you to identify the state where you paid unemployment taxes and to figure any adjustments or credit reductions.12Internal Revenue Service. Instructions for Form 940 A credit reduction applies when a state has borrowed from the federal trust fund and hasn’t repaid within the statutory timeline; employers in that state lose part of the 5.4% credit. Paying Colorado premiums late can also cost you the full credit, so state timeliness carries federal consequences.
Misclassifying Workers Is Expensive
Treating employees as independent contractors is one of the fastest ways to accumulate a large surprise UI bill. If the Division determines that people you classified as contractors were actually employees, you owe all back premiums plus interest at 1.5% per month for every worker affected.
Willful misclassification carries additional fines. A first-time willful violation can result in fines of up to $5,000 per misclassified employee, and a second or subsequent violation raises that to $25,000 per worker and can bar the business from state contracts for up to two years.13Colorado Department of Labor & Employment. Worker Misclassification Reporting and Advisory Opinions The test looks at whether the business controls how the work gets done, not just the end result. Calling someone a contractor in a written agreement doesn’t settle the question. The Division’s audit unit offers advisory opinions if you want guidance on a specific arrangement before committing to a classification.
Buying a Business Means Inheriting Its Rate
If you acquire all or substantially all of an existing Colorado business, the seller’s experience rating record transfers to you, including its claims history and premiums paid. Buying a business with a poor rating means inheriting a high premium rate.14Justia. Colorado Code 8-76-104 – Successorship
If the buyer wasn’t already an employer and there were multiple predecessors with different rates, the buyer gets the highest of them. If the buyer already had an account and the two entities share no common ownership or management, the buyer keeps its existing rate for the rest of the calendar year, and the predecessor’s experience folds in at the next annual recalculation.
Colorado’s anti-abuse rules align with the federal SUTA Dumping Prevention Act.15GovInfo. SUTA Dumping Prevention Act of 2004 If the Division finds that someone acquired a business primarily to get a lower rate, the experience won’t transfer and the successor is assigned the introductory rate instead. Transfers between commonly owned entities require mandatory combination of experience records and immediate rate recalculation. Attempting to manipulate rates through shell transfers can carry civil and criminal penalties.
FAMLI Is a Separate Payroll Tax
Colorado’s Paid Family and Medical Leave Insurance program is not part of unemployment insurance. FAMLI premiums are 0.88% of wages, split evenly between employer (0.44%) and employee (0.44%).16Colorado Family and Medical Leave Insurance. Employers UI premiums, by contrast, are funded entirely by the employer. The two programs are administered separately, and paying one doesn’t satisfy the other.