Utah businesses are going to see a drop in the amount they pay for unemployment insurance.

This morning, Gov. Gary Herbert signed S.B. 129, the Unemployment Insurance Modifications bill, into law, putting $26.4 million back into the private sector.

The new law reduces the maximum unemployment insurance rate for all businesses paying at the highest rate. These are generally businesses with high levels of seasonal workers or high employee churn rates. These businesses will see their rates drop from 9.4 percent to 7.4 percent—meaning big savings for some.

For example, a company with 35 employees that was paying the highest rate would have paid nearly $100,000 in unemployment tax annually. That number will now drop to $80,000.

“This change could mean some reinvestment in technology or creating new positions,” said Aaron Call, regional vice president of G&A Partners, a licensed professional employer organization and H.R. outsourcing provider. “A business paying the maximum rate will save close to $600 per year, per employee.”

All businesses that were paying less than the highest rate will also see their rates decrease by 0.1 percent.

Over the last 12 months, the Utah economy has added over 30,000 jobs—an effort likely to get an additional boost with this tax cut. Utah’s unemployment rate is now six percent—two and a half points below the national rate—and our economy is growing at nearly two and a half times the rate of the U.S. economy.

Cutting tax rates means businesses will have more money to retain talent, invest in equipment and strengthen our economy.