Unemployment Benefits Salary
Unemployment benefits (sometimes called unemployment salary) are payments your state's labor department makes to you from the state's unemployment insurance plan. These payments help you pay for some essentials as you continue looking for new work. When you apply for these benefits, your state determines your eligibility and calculates how much you can receive based on your past salary. Depending on the state, you can receive up to about half of your former weekly salary as a weekly benefit.
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Base Year Salary
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The biggest factor in how much you will collect under unemployment benefit is the amount of salary you drew as an employee during your base year. Your base year is the first four the of the past five calendar quarters before your unemployment filing date. The wages that the labor office considers during your base year are the ones paid to you by a covered employer. Self employment, contract work or commission salaries usually don't count. If you have a question about whether part or all of your salary counts toward your work, contact your state's labor office (see Resources).
Alternate Base Year
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Some claimants won't qualify for unemployment benefits based on their base year salaries. If they only recently started working or were only employed at their last employer for a couple of months, your state's labor office may use an alternate base year to determine your benefit eligibility and payments. This alternate year is the previous five complete calendar quarters before you filed for unemployment. Some states also allow you use the alternate base period if you would collect more benefit payments based on it than if you used the traditional base year salary. This rule varies depending on the state. You should contact your state's labor office to determine if you're eligible for an alternate base year calculation (see Resources).
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Calculating Unemployment Salary
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The formula your state uses to calculate your benefit amount may vary but you will usually end up collecting about half of the average salary you earned as employee during your base year. You may also receive more benefits if you have a dependent spouse or child to care for, but this also varies by state. Each state also has a maximum benefit guideline that caps your payments regardless of what you qualify for. This guidelines can change each year because it's based on the average salary of the workers in that state. Using the average worker's salary, the state determines what the average benefit amount should be to set the maximum guidelines. Check with your state's office of labor to receive the most accurate information about your state's maximum (see Resources).
Severance Salary
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Another way salary can affect your unemployment benefits is through severance pay. Severance pay is a benefit your employer pays you to help you transition when he terminates your job. Usually, you only receive severance if you are being laid off or losing your job through some other circumstance beyond your control. The employer pays you a lump sum equal to several weeks of your salary. You can't collect unemployment for the weeks covered by severance pay. For example, if your last day of work is January 20, 2011 but you receive three weeks of severance pay, you can't collect unemployment until February 11, 2011.
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