Nebraska Unemployment Insurance Tax for New Employers: 1.25% and 5.40% Starting Rates, $9,000 Wage Base and 2026 Categories
Nebraska Unemployment Insurance Tax for New Employers: 1.25% and 5.40% Starting Rates, $9,000 Wage Base and 2026 Categories
If you hire your first employee in Nebraska, you will owe unemployment insurance (UI) tax to the Nebraska Department of Labor (NDOL) on that person's wages. A new employer does not start at the rate an established business pays. For calendar years 2023 to 2026, new employers start at 1.25% for non-construction work and 5.40% for construction. The taxable wage base is $9,000 per worker, or $24,000 for category 20 employers.
This guide explains what those numbers mean in practice, how to find the rate NDOL assigns to your account, the 2026 combined rate categories, the appeal window, and the other registrations a new employer usually needs.
The Starting Rates: 1.25% and 5.40%
Nebraska uses two starting rates for new employers, split by industry:
- 1.25% for non-construction employers
- 5.40% for construction employers
These starting rates cover calendar years 2023 to 2026. As of this writing, NDOL has not posted 2027 combined rates, so do not assume the 2026 figures carry forward. Check the NDOL combined tax rates page before you build your 2027 payroll budget.
The $9,000 Wage Base and the $24,000 Exception
UI tax applies only to the first part of each worker's pay. Under Neb. Rev. Stat. 48-648 and 48-649, the taxable wage base is $9,000. Employers in category 20 use a $24,000 wage base instead.
Two examples show the effect. These are illustrations only, and the rate on your notice controls. At 1.25% on the full $9,000 base, UI tax is $112.50 for each worker who earns at least $9,000 in the year. A worker who earns less is taxed only on the wages actually paid. If your notice places you in category 20, 5.40% on $24,000 comes to $1,296 for each worker who earns at least that much.
2026 Combined Tax Rates by Category
Your UI rate is tied to a numbered category. NDOL's combined tax rates page, revised December 2, 2025, lists these 2026 combined rates:
| Category | 2026 combined tax rate |
|---|---|
| 1 | 0.00% |
| 2 | 0.14% |
| 10 | 0.50% |
| 18 | 1.00% |
| 19 | 1.19% |
| 20 | 5.40% |
Category 20 is the one to watch. It carries a 5.40% combined rate and the $24,000 wage base, and that rate matches the construction starting rate. Do not assume a construction business lands in category 20 automatically. Confirm your category with NDOL and read the category printed on your notice.
How to Find Your Rate and Appeal It
NDOL issues a combined tax rate notice for your employer account. You can also see your rate by logging in at NEworks.nebraska.gov.
If you disagree with your rate, you may appeal within 30 days of the notice date under Neb. Rev. Stat. 48-650. The clock runs from the date printed on the notice, not from the day you open it. Put that deadline on your calendar as soon as the notice arrives.
For questions about your UI tax, call the UI Tax Help Line at (402) 471-9898.
Construction Employers: Contractor Registration
Construction employers also face contractor registration with NDOL. Treat it as a separate step from your UI tax account, and check NDOL's contractor registration information to confirm what applies to your business.
Other Registrations a New Employer Needs
Nebraska registers businesses by activity, not through one general license. Most new employers deal with three state offices:
- Department of Labor: the UI tax account, plus contractor registration for construction work.
- Department of Revenue: a Nebraska ID for sales tax and income tax withholding. Withholding applies once you have employees. Nebraska's state sales tax rate is 5.5%, and you need a sales and use tax permit if you make retail sales, rent or lease tangible personal property, or provide taxable services.
- Secretary of State: entity filings and trade name registrations.
No State or County Business License
Nebraska has no general state business license and no county business license. Occupational licensing depends on the trade, so use this table to find the right contact:
| Activity | Who licenses or regulates it |
|---|---|
| Electricians | State Electrical Division |
| Plumbers | City or village nearest the job |
| Food and pesticide applicators | Nebraska Department of Agriculture |
| Health professions and child care | Department of Health and Human Services (DHHS) |
| Passenger carriers and household goods movers | Public Service Commission, which regulates only these two groups |
| Retail liquor sales | Liquor Control Commission, which works with the city or county that grants the retail license |
Local requirements add another layer. Cities may impose a city sales tax and a city occupation tax, and cities and counties control zoning. Nebraska has 93 counties and 528 municipalities (cities and villages), so the local rules that apply to you depend on your exact address. Confirm zoning and local tax questions with the city or county where you will operate.
Entity Filings That Come First
If you have not formed your business yet, the Secretary of State handles the entity filing, and the recurring filing is the biennial report. Keep these points in mind:
- LLC: file a Certificate of Organization with a $100 filing fee. The biennial report is filed every odd-numbered year between January 1 and April 1, at $25 electronically or $30 on paper.
- Corporation: file Articles of Incorporation with a $100 filing fee. The Biennial Report and Occupation Tax is due March 1 of each even-numbered year. The $26 figure applies when paid-up capital stock does not exceed $10,000 and rises above that level, so check with the Secretary of State for your exact amount.
- Registered agent: Nebraska's term for the agent for service of process. The agent must be an individual residing in Nebraska or an entity authorized to transact business in the state, and the agent's office must match the registered office. Changing the agent or office costs $25 online or $30 on paper.
- Publication: new LLCs and corporations must publish a notice in a legal newspaper for three successive weeks and file proof of publication with the Secretary of State.
- Trade names: register with the Secretary of State. A registration lasts 10 years and requires newspaper publication. The fee is $100 online through eDelivery or $110 in office or by mail, with a $110 renewal.
Common Mistakes to Avoid
- Budgeting payroll tax at 1.25% without checking the category shown on your notice.
- Applying the $9,000 wage base to every employer. Category 20 uses $24,000.
- Letting the 30-day appeal window pass without reviewing the notice.
- Assuming the 2026 rates continue into 2027 without checking NDOL.
- Skipping contractor registration when you do construction work.
Next Steps
- Confirm your UI tax account is set up with NDOL and watch for your combined tax rate notice.
- Log in at NEworks.nebraska.gov to confirm your rate and category.
- If you have employees, set up income tax withholding with the Department of Revenue.
- If you do construction work, complete contractor registration with NDOL.
- Calendar the 30-day appeal deadline from your notice date.
Disclaimer: This guide is informational only. It is not legal, tax, or accounting advice, and it does not create an attorney-client or accountant-client relationship. Rates, categories and wage bases can change, and the notice NDOL sends you controls. Talk with a qualified CPA or attorney before making decisions about payroll taxes, entity structure or a construction business.