The taxable wage base (TWB) is the maximum amount of an employee's earnings that is subject to unemployment taxes (UI Tax) in a given calendar year. It is the same for all employers in the state and does not change during a calendar year.
All wages earned up to the TWB are called Taxable Wages. A Contributory employer will pay UI tax at a percentage on this amount. An employee's taxable wage amount per quarter is never more than the total wages for the quarter.
All earnings for a worker that exceeds the TWB limit is called Excess Wages. A Contributory employer does not pay unemployment tax on wages paid over the TWB. An employee's excess wage amount per quarter is never more than the total wages for the quarter.
Each quarter, the total wages reported will equal the Taxable Wages for the quarter plus the Excess Wages for the Quarter. (Taxable + Excess = Total)
Click Taxable Wage Base and Excess Wages to find out more.
Multi-State Employers can use wages earned in another state to compute wages paid in excess of the TWB.
Filers can view the Instructions for Quarterly Contribution and Wage Report (MODES-4-5) for further instructions and tips on filing their Quarterly Contribution and Wage Report.
If you file your reports online with UInteract, your excess wages will be calculated automatically.
Example of how to calculate Total, Excess, and Taxable wages per quarter.
In this example, the TWB is $13,000.00. It uses fictitious company X, which has two employees, John Smith and Jane Doe.
The employees' earnings in each quarter in the year are:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| John Smith | $4,000.00 | $4,000.00 | $5,000.00 | $3,500.00 |
| Jane Doe | $7,000.00 | $7,000.00 | $0.00 | $4,000.00 |
1st quarter calculations
| Total Wages Paid for Quarter | Total Wages for Year | Taxable Wages for Year (TWB=13,000) | Excess Wages for Quarter | Taxable Wages for Quarter | |
| John Smith | $4,000.00 | $4,000.00 | $4,000.00 | $0.00 | $4,000.00 |
| Jane Doe | $7,000.00 | $7,000.00 | $7,000.00 | $0.00 | $7,000.00 |
| Quarter Totals | 1$11,000.00 | 2$0.00 | 3$11,000.00 |
2nd quarter calculations
| Total Wages Paid for Quarter | Total Wages for Year | Taxable Wages for Year (TWB=13,000) | Excess Wages for Quarter | Taxable Wages for Quarter | |
| John Smith | $4,000.00 | $8,000.00 | $8,000.00 | $0.00 | $4,000.00 |
| Jane Doe | $7,000.00 | $14,000.00 | $13,000.00 | $1,000.00 | $6,000.00 |
| Quarter Totals | 1$11,000.00 | 2$1,000.00 | 3$10,000.00 |
3rd quarter calculations
| Total Wages Paid for Quarter | Total Wages for Year | Taxable Wages for Year (TWB=13,000) | Excess Wages for Quarter | Taxable Wages for Quarter | |
| John Smith | $5,000.00 | $13,000.00 | $13,000.00 | $0.00 | $5,000.00 |
| Jane Doe | $0.00 | $14,000.00 | $13,000.00 | $0.00 | $0.00 |
| Quarter Totals | 1$5,000.00 | 2$0.00 | 3$5,000.00 |
NOTE: Since Jane Doe did not earn any wages in the 3rd quarter, the employer will not include her on the 3rd quarter filing.
4th quarter calculations
| Total Wages Paid for Quarter | Total Wages for Year | Taxable Wages for Year (TWB=13,000) | Excess Wages for Quarter | Taxable Wages for Quarter | |
| John Smith | $3,500.00 | $16,500.00 | $13,000.00 | $3,500.00 | $0.00 |
| Jane Doe | $4,000.00 | $18,000.00 | $13,000.00 | $4,000.00 | $0.00 |
| Quarter Totals | 1$7,500.00 | 2$7,500.00 | 3$0.00 |
1: Item 4, "Total Wages Paid" on the Quarterly Contribution and Wage Report (MODES-4).
2: Item 5, "Wages Paid in Excess of $(TWB for the year)" on the Quarterly Contribution and Wage Report (MODES-4).
3: Item 6, "Taxable Wages" on the Quarterly Contribution and Wage Report (MODES-4).