Delaware Unemployment Tax: Rates, Filing, and FUTA

Delaware employers pay unemployment tax quarterly on each employee’s wages up to a capped amount, at a rate that ranges from a 1% new-employer rate to a 6.3% delinquent rate depending on your history and whether you file on time. The Delaware unemployment tax is administered by the Division of Unemployment Insurance under Title 19, Chapter 33 of the Delaware Code, and it was restructured by House Bill 433 in 2024 with a new taxable wage base phasing in from 2025. If you meet either of two liability thresholds, you must register, file Form UC-8 every quarter, and pay by the last day of the month after each quarter closes.

Who Has to Pay

Two independent tests trigger liability, and tripping either one makes you responsible for the tax. The first is a payroll test: paying $1,500 or more in gross wages during any calendar quarter. The second is an employment test: employing at least one person for any part of a day in each of 20 different weeks within a calendar year, regardless of how much you paid them. Meeting either threshold in the current or preceding calendar year is enough.¹

Two industries have their own thresholds. Agricultural employers become liable at ten or more workers or $20,000 or more in cash wages in any single calendar quarter. Domestic employers (people hiring household workers like nannies or housekeepers) become liable at $1,000 or more in cash wages in any quarter.²

501(c)(3) nonprofits have an alternative. Under federal law, they can skip quarterly tax payments and instead reimburse the state dollar-for-dollar for any unemployment benefits actually paid to former employees. For organizations with low turnover, the reimbursement total can run well below what the quarterly tax would be. The election is filed with the Division of Unemployment Insurance, typically before the start of a calendar year.

Rates and the Taxable Wage Base

The tax applies only to a capped portion of each employee’s annual wages, the taxable wage base. House Bill 433 restructured that cap with a three-year phase-in beginning at $12,500 for 2025, and the figure may change year to year during the transition. Verify the current wage base on the Division of Unemployment Insurance’s employer services page each January. Earnings above the cap are exempt.

Your rate depends on where you sit in the system:

New employers pay the standard 1% rate set by HB 433. Construction firms in NAICS categories 236, 237, and 238 are an exception and pay either the average rate in their specific NAICS category or the average construction rate across all three, whichever is higher.²
Experienced employers receive a rate tied to their claims history. For 2026, experienced rates are set using Table B with an assessment history cost multiplier of 0.95.
Delinquent employers (those who fail to file required reports or pay assessments due by September 30 of the prior year) pay 6.3% on taxable wages for the following 12 months.¹

Two separate assessments sit on top of the base rate. All employers owe a special training tax of 0.15% on taxable wages.³ For 2026, Delaware is also billing a separate operations and technology tax of 0.2%, which is no longer bundled into the UI rate and appears as its own quarterly charge. Both are mandatory and show up on the quarterly report.

How Your Rate Gets Set

Experience rating is the biggest driver of what you pay once you’re past the new-employer stage. When a former employee files a claim, the Division traces back to their base-period employers and charges each one a proportional share of benefits paid, based on each employer’s share of the total gross wages during the base period. If the person worked only for you, your account absorbs 100% of the charges.⁴

Once you’ve paid wages in at least two fiscal years (July 1 through June 30) before the July 1 computation date, the state assigns an experience rate based on the ratio of benefit charges to taxable wages over the three prior fiscal years. A high ratio pushes your rate up; a low ratio pulls it down. This is why contesting improper claims matters. Every dollar charged to your account shapes next year’s rate.⁴

Registering Before You Can File

You can’t file quarterly reports until you have an employer account number. Registration runs through Form UC-1, “Report to Determine Liability and If Liable Application for Employer Account Number.” The form must be completed and returned within 10 days of receipt, whether or not you believe you meet the liability thresholds.⁵

You’ll need to provide:

Your Federal Employer Identification Number (FEIN).
Legal business name and any trade or DBA name.
Physical and mailing addresses for your Delaware operations.
The exact date you first paid wages in Delaware.
A narrative description of what your business does, which the Division uses to assign a NAICS code and your initial rate.

The NAICS code matters more than it looks. Construction employers are rated differently from other industries, and a miscoded account can mean overpaying for years before an audit catches it.

Filing Quarterly and Paying On Time

Once your account is active, you file Form UC-8/8A each quarter. The report lists total gross wages paid to each employee, the excess wages above the taxable wage base, and the resulting taxable wages. Taxable wages multiplied by your assigned rate produce the tax due.

Reports and payments are due by the last day of the month following each quarter:

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

Deadlines occasionally shift. For the first quarter of 2026, the Division delayed UC-8 notifications because of printing issues and pushed the reporting deadline to May 29, 2026.⁶ Extensions are announced on the Online Employer Services portal, which is also where employers file reports and pay electronically. Each report requires individual Social Security numbers and wage totals, so clean payroll records make the quarterly filing much faster.

What Late Filing Costs

Delaware charges interest at 18% per year on late payments, calculated at 1.5% per month from the due date. A $5,000 tax bill unpaid for three months picks up $225 in interest on top of the original balance.

The bigger hit is the delinquent employer rate. Fail to file required reports or pay assessments due by September 30 of the prior year, and the Division reclassifies you as delinquent and assigns a 6.3% rate on all taxable wages for the next 12 months.¹ That can be several times what you would have paid with a clean record, and the trigger is simply letting a filing slip past September 30.

Late state payments can also damage your federal credit. If Delaware reports your account as delinquent to the federal Department of Labor, the IRS may reduce or deny the 5.4% FUTA credit on your Form 940, pushing your effective federal rate from 0.6% up toward 6.0% on the first $7,000 per employee.⁷

FUTA Runs Alongside the State Tax

Every employer subject to Delaware’s unemployment tax also owes federal unemployment tax under FUTA, which is reported and paid separately on IRS Form 940. The FUTA rate is 6.0% on the first $7,000 of each employee’s annual wages, but employers who pay their state tax on time receive a credit of up to 5.4%, dropping the effective rate to 0.6%, or roughly $42 per employee per year.⁷

The credit shrinks in “credit reduction” states that carry outstanding federal loan balances. Delaware is not currently on that list. For 2026, only California and the U.S. Virgin Islands face potential credit reductions, so Delaware employers who stay current on state tax keep the full 5.4% credit.

Buying a Business: Successor Liability

Acquire an existing Delaware business and you don’t start with a clean slate. The Division treats the buyer as a successor employer, and what that means depends on whether you were already an employer in Delaware at the time of purchase.

When an existing employer acquires another employer’s business and there is common ownership, management, or control between the two, the unemployment experience of the acquired business transfers to the buyer. Both employers’ rates are recalculated immediately upon the transfer date.⁸ From the following January 1, your rate reflects the combined experience, including all benefit charges and taxable wages from the predecessor’s history.⁴

The successor is also liable for all unpaid contributions, interest, and penalties the predecessor owed at the time of transfer. Due diligence before closing should include a written status check with the Division on the seller’s unemployment account, so outstanding balances don’t become your problem the day the deal closes.⁴ Delaware also has anti-SUTA-dumping provisions: a buyer who was not an employer at the time and acquires a business primarily to inherit a lower rate will be denied the experience transfer and assigned the new-employer rate instead.⁸

Records to Keep

Federal law requires employers to keep employment tax records for at least four years after the tax becomes due or is paid, whichever is later.⁹ For Delaware unemployment purposes, that means quarterly reports, wage detail records, proof of payment, and any correspondence with the Division. If the Division audits your account or a former employee disputes a benefit charge, those records are your defense.

1
Delaware Code Online. Delaware Code Title 19 – Unemployment Compensation
2
Delaware Department of Labor. Unemployment Insurance
3
Cornell Law Institute. 19 Del. Admin. Code 1202-19.0 – Employment Training Tax
4
Delaware Department of Labor. Employer FAQs
5
Delaware Department of Labor. Report to Determine Liability and If Liable Application for Employer Account Number
6
Delaware Department of Labor. Online Employer Services
7
Internal Revenue Service. Topic No. 759, Form 940, Employers Annual Federal Unemployment Tax Act (FUTA) Tax Return
8
Delaware Code Online. Unemployment Compensation – Delaware Code Title 19 Chapter 33 Subchapter III
9
Internal Revenue Service. Topic No. 305, Recordkeeping