The Oregon Employment Department announced that unemployment insurance and paid leave tax rates are set to remain unchanged in 2025. New employers will continue to pay an unemployment insurance rate of 2.4%, the same as in 2024. Meanwhile, established businesses will also maintain their current tax schedule for the upcoming year.
Employers contribute payroll taxes for unemployment insurance up to a slightly increased income level, rising from $52,800 to $54,300 for each employee. These taxes are deposited into the state’s unemployment trust fund, which finances weekly benefits for Oregonians unemployed through no fault of their own.
Oregon’s unemployment insurance trust fund has been described as one of the strongest in the nation. Oregon Employment Director David Gerstenfeld noted the fund’s resilience following the pandemic, during which the state refrained from raising taxes or borrowing money — measures other states resorted to in response to COVID-19-related layoffs.
The trust fund’s health has also been bolstered by significant interest earnings, totaling over $125 million in 2023 alone. This solid financial foundation allows tax rates to remain lower even during economic strains.
The state’s unemployment rate has stabilized around 4% for over a year, contributing to the absence of a surge in benefit claimants. Historically, this rate is considered low, with such stability being rare in Oregon’s economic history.
In addition to unemployment insurance, employers in Oregon also contribute to the Paid Leave Oregon Trust Fund, which supports employees needing leave for various family or medical reasons. This fund allows for up to 12 weeks of paid leave, with specific provisions for new parents and victims of domestic or sexual violence.
Starting in January, a new type of family leave will be available for parents adopting or fostering children, providing coverage for necessary pre-placement activities.
Overall, these measures reflect Oregon’s proactive approach to maintaining a robust economic environment for both employers and employees, suggesting a commitment to supporting the workforce even in uncertain times. The stability in tax rates offers reassurance to businesses, while the expanded paid leave options highlight a compassionate approach towards working families.
In summary, the stability in unemployment insurance and paid leave tax rates for 2025 underlines Oregon’s healthy economic foundation, benefiting both employers and employees while addressing the needs of families and vulnerable individuals.