Taxes

Colorado ranks among the top-20 states (16th) for best corporate tax system and business-friendly tax climate according to the Tax Foundation's 2017 State Business Tax Climate Index.

Unemployment & Worker's Comp

Colorado's unemployment insurance rates vary among established employers, depending upon the history of taxes and benefits paid, and the Unemployment Insurance Fund balance. 

The majority of new employers (non-construction) are charged a standard tax based rate on two separate factors, including:

  • Base Rate (0.0170 percent)
  • Bond Principal Rate (currently 0.0043 percent)
  • Resulting in combined rate of 0.0213 percent on the first $11,800 (2015) of each employee’s calendar year earning.

New employers' rates change during the first three years of operations until they are "experience rated" on payroll data and the number of Unemployment Insurance claims. Employers in construction-related businesses may be subject to a different tax base rate.

Colorado had the 16th-lowest workers' compensation rates in the country in 2016, with an average rate of $1.56 per $100 of payroll. Workers' comp  insurance is purchased through private insurance companies in Colorado. The Colorado Legislature created Pinnacol Assurance, a nonprofit insurance carrier, to sell worker’s compensation insurance. The Colorado Division of Insurance approved a 1.9 percent reduction for the average loss costs component of workers' comp insurance premiums for 2016.