Kentucky SUTA Tax Calculator
Figure basis: Official U.S. Department of Labor, Office of Unemployment InsuranceState Unemployment Tax Act (SUTA) tax is the state unemployment insurance tax that employers pay to fund unemployment benefits in Kentucky. This calculator estimates your Kentucky SUTA liability for the 2026 tax year. Enter the average annual wages per employee, your number of employees, and your assigned SUTA rate to see the taxable wages, tax per employee, and total tax. SUTA is charged only on the first $12,000 of each employee's wages (the 2026 Kentucky taxable wage base); wages above that per employee are not taxed. Your rate is set by the state based on your business's unemployment claim history (your "experience rating"); a new employer pays 2.7%. SUTA is separate from the federal FUTA tax and, in most states, is paid entirely by the employer and never deducted from employee wages. All wage-base and rate figures are sourced from U.S. Department of Labor, Office of Unemployment Insurance and verified for 2026. Replace the default rate with the rate on your state tax-rate notice for an exact figure.
In Kentucky, employers pay SUTA on the first $12,000 of each employee's wages for 2026, and a new employer pays 2.7%. For 5 employees earning $50,000 each at 2.7%, the estimated annual SUTA tax is $1,620.00 ($324.00 per employee).
How Kentucky SUTA tax works
Kentucky charges state unemployment tax on each employee's wages up to the taxable wage base of $12,000 for 2026. Once an employee has earned that much in the year, no further SUTA is due on that employee. Your rate is assigned by the state from your experience rating; a new employer pays 2.7%.
taxable wages per employee = min(annual wages, $12,000)
SUTA tax per employee = taxable wages per employee x rate / 100
total SUTA tax = SUTA tax per employee x number of employees
Worked example: 5 employees each earning $50,000 in Kentucky at 2.7%. Each employee's taxable wages are capped at $12,000, so the tax per employee is $324.00 and the total is $1,620.00.
Kentucky SUTA figures (2026)
| Figure | Value | Source |
|---|---|---|
| Taxable wage base | $12,000 | U.S. Department of Labor, Office of Unemployment Insurance |
| New employer rate | 2.7% | U.S. Department of Labor, Office of Unemployment Insurance |
| Experience rate range | 0.3% to 9% | U.S. Department of Labor, Office of Unemployment Insurance |
The experience-rate range shown is the base statutory range. Most states add mandatory assessments on top (for example a fund-building, solvency, or administrative surcharge), so an employer's effective rate can be higher than the range shown, and the new-employer rate may exclude those add-ons. Your exact assigned rate is on your annual state tax-rate notice.
Kentucky's wide rate spread, explained
Kentucky's 2026 taxable wage base is $12,000, one of a handful of states that lifts the base by a small step each year rather than holding it flat. SUTA applies to the first $12,000 each worker earns in the calendar year and nothing above it, so the cost per employee is capped no matter how high the salary.
The standout figure in Kentucky is the top of the rate schedule. New employers pay a fixed 2.7%, which caps first-year cost at $324.00 per employee on the $12,000 base. Once experience-rated, employers fall somewhere between 0.3% and 9%, a ceiling that is among the higher statutory tops in the country. A spotless account pays as little as $36.00 per employee, but a business with heavy turnover or repeated layoffs can be pushed toward $1,080.00 per employee, more than triple the new employer figure.
That wide spread is why claims management matters so much in Kentucky. Because every charged benefit claim feeds into the ratio that sets your rate, contesting improper claims and stabilizing headcount can move you down the schedule over time. New employers should budget the 2.7% rate for the first full year, then read the annual notice from the Office of Unemployment Insurance carefully and enter the exact assigned percentage in the calculator above, since the gap between the 0.3% floor and the 9% ceiling is large enough to matter to cash flow.
Kentucky SUTA tax: frequently asked questions
What is the Kentucky unemployment (SUTA) taxable wage base for 2026?
For 2026, Kentucky employers pay state unemployment tax on the first $12,000 of each employee's wages. Wages above $12,000 per employee are not subject to SUTA.
What is the Kentucky new employer SUTA rate?
New employers in Kentucky pay a SUTA rate of 2.7% until they have enough history to be experience-rated. On the $12,000 wage base that is up to $324.00 per employee per year.
How is Kentucky SUTA tax calculated?
Multiply each employee's wages, capped at the $12,000 taxable wage base, by your assigned experience rate, then add up across employees. SUTA is primarily an employer-paid tax and is not deducted from employee pay.
Is the Kentucky SUTA rate the same for every employer?
No. After the new-employer period, Kentucky assigns each employer an experience rate based on its history of layoffs and claims, generally ranging from about 0.3% to 9% for experience-rated employers before any state add-on surcharges. The rate field above defaults to the new-employer rate; replace it with the rate on your state tax notice for an exact figure.
Official sources
- Kentucky unemployment taxable wage base and rates (tax year 2026): U.S. Department of Labor, Office of Unemployment Insurance, as at Jul 15, 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 15 July 2026. See our methodology. General information, not tax or legal advice.