Stable Tax Rates: What Oregon’s Unemployment Insurance & Paid Leave Mean for You!
Exciting news from the Oregon Employment Department: Unemployment insurance and paid leave tax rates will remain unchanged for 2025!
Photo Credit: Chris Lehman/KLCC
As we gear up for the new year, new employers in Oregon can breathe a sigh of relief knowing they’ll be paying the same unemployment insurance rate of 2.4% in 2025 as they did in 2024. This consistency is not just a win for newcomers; it’s a stability that seasoned businesses can also appreciate.
For businesses that have been around for a year or more, the tax schedule remains unchanged as well, despite variable rates. Employers contribute unemployment insurance payroll tax up to a slightly increased wage limit, which is set to rise from $52,800 to $54,300. This increase is a minor adjustment that reflects Oregon’s economic growth.
But where does all that money go? These payroll taxes feed into the state’s unemployment trust fund, a vital resource that ensures Oregonians who face job loss through no fault of their own can receive much-needed benefits. Each November, the state assesses the previous year’s demand, ensuring that rates reflect the needs of the community.
Oregon Employment Director David Gerstenfeld is proud to announce that “Oregon’s self-balancing unemployment insurance trust fund is among the healthiest in the nation.” Thanks to this solid foundation, Oregon employers have faced lower tax rates even amid economic challenges, a feat not all states can claim.
Looking back, Oregon managed to navigate the pandemic without raising taxes or borrowing from its unemployment fund—a rarity compared to many other states that had to take drastic measures. The fund is also a savvy investor, raking in over $125 million in interest in 2023 alone.
Gerstenfeld confidently stated, “All of this means that Oregon’s Unemployment Insurance Trust Fund is solvent and ready for whatever economic downturn may come our way next.”
The fluctuations in the unemployment insurance tax rate over the years have kept employers on their toes. After a spike in 2021, a dip in 2022, and a slight rise in 2024, stability for 2025 is a welcome change—especially given the current unemployment rate, which has held steady around 4% for over a year!
State Employment Economist Gail Krumenauer noted, “It’s rare for Oregon’s unemployment rates to sit at or below 4.5%, a benchmark we’ve only seen a couple of months since the mid-90s and recently leading up to the pandemic.”
In addition to unemployment insurance, employers are also contributing to the Paid Leave Oregon Trust Fund. Unlike the unemployment insurance tax, this fund is bolstered by contributions from both employees and employers alike.
This innovative fund allows employees to take up to 12 weeks of paid leave for family, medical, or “safe leave” reasons—an essential support system for those navigating challenging life circumstances. Workers who need time off for pregnancy can even access up to 14 weeks of leave!
What qualifies for this program? Time off to recover from illness, care for a family member, bond with a new child, or even seek help for victims of domestic or sexual violence. The scope of support available is remarkable.
In 2024, contributions to the fund were set at 1% of an employee’s gross pay up to $132,900, with employees paying 0.6% and employers contributing 0.4%. Moving into 2025, these rates will remain steady, now covering gross pay up to $176,100.
But here’s the exciting part: starting in January, Oregonians can apply for a new type of family leave to support parents who are in the process of adopting or fostering a child. This legislative change allows for various pre-placement activities to be covered under the state program, making it easier for families to grow.
“Pre-placement leave is designed for people who are actively in the process of adopting or fostering a new child into their home,” stated Karen Madden Humelbaugh, director of Paid Leave Oregon. Eligible employees will now be able to take leave for essential activities such as counseling sessions, court appearances, legal consultations, and related travel, ensuring that transitioning into parenthood is as smooth as possible.
