Unemployment insurance can be collected by workers separated from their jobs for acceptable reasons, such as a layoff, the business closing or a natural disaster impeding the ability to conduct business. Full-time commission income before the job loss is not used to calculate benefits. Commission income when added to a salary is included. After job loss, commission income can impact unemployment benefits, depending on the state and the amount of commission.
Individual state department of labor offices list how much commission income counts toward benefit calculation for unemployment insurance purposes. For example, in Illinois, workers whose entire income was derived from commission during the base period are ineligible for unemployment benefits. Workers who received a base salary plus commission, however, are allowed to use the commission as part of the total income earned during the base period.
State unemployment offices typically require beneficiaries of unemployment insurance to report any income earned during the previous reporting period. For example, Tennessee requires people collecting unemployment to file a claim report once a week for the previous week. Any income earned during that previous week, whether or not it has been paid to the worker, must be reported, including commission earnings.
Each state sets a threshold on how much a worker can earn before that week's benefit is reduced. For example, a worker receiving the maximum amount of $275 per week in Tennessee in 2011 is allowed to make up to $68 a week and still receive the full benefit amount. For every dollar over $68 earned in a benefit week, that amount is deducted from the benefit check. An unemployment recipient earning $75 in commission from sales during a benefit week in Tennessee would receive an unemployment check for $268 the following week, which is the $275 benefit minus the $7 over the $68 threshold allowable.
Types of Income
Income must be reported regardless of its origin, including commission income. A worker who earns a $100 commission payment during a benefit week must report that income. States vary on when the reporting of commission payments must be completed. Tennessee requires that commission earnings be reported during the next wage claim, usually the week after the earning occurred. Maryland does not require commission income to be reported until the reporting event following the payment of commission. For example, a worker earns $100 in commission on June 15 in Tennessee. That $100 should be reported during the following week's certification process even if the actual payment is not going to arrive until July. In Maryland, if the $100 was earned in June but would not be paid until July 1, the claimant is not required to report it until the certification process following July 1.
Each state sets limits on how much a worker can earn before being ineligible to continue the current cycle of unemployment compensation. At that time, the worker is removed from the unemployment roles. The worker must then earn a minimum amount of wages before being eligible to apply for new benefits if a job is lost. Some states allow full-time commission positions to qualify as wages for the purpose of future unemployment benefits, while others do not.
Workers can check with their state's department of labor or the state's unemployment office for state-mandated guidelines.
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