Are Unemployment Benefits Based on Previous Salary?
- The amount of unemployment benefit you can collect depends on the state in which you work and your previous salaries. Each state independently defines its formula to calculate weekly benefit amounts, but all states account for previous earnings in some way. Certain states may take your previous annual earnings into consideration when determining weekly benefit amounts. Other states, such as New York, may use your pay during the highest paid quarter or two quarters of the base period.
- All states place a cap on the number of weeks you can receive unemployment benefits. For example, in California, you can receive up to 79 weeks, while in Utah, you can receive up to 49 weeks of benefits. States may pay up to half of your previous earnings. Consequently, if you earned higher previous earnings, you may receive higher benefit amounts but a comparatively smaller percentage of the amount you earned while employed. Maximum limits are typically determined by your state's average income. In addition to your previous income, your length of employment impacts the benefit amount you receive.
- If you face a reduction in your schedule of working hours, you may be eligible for unemployment benefits. Normally, you can receive a full benefit for the weeks when hours of work are zero, and you can receive partial benefits when your work hours are less than usual. Your work hours or earnings must be reduced by at least one-third to qualify for any benefit amount. Generally, the higher your work or earnings reduction, the greater the benefit amount you receive.
- Your receipt of Social Security benefits generally doesn't impact your eligibility for weekly unemployment benefits, as long as you're involuntarily unemployed. You must, however, report pension benefits to your state's Division of Unemployment Assistance office. Pension benefits can deter eligibility or reduce your weekly benefit amount. If you receive worker's compensation payments, your unemployment benefits may be reduced. The total amount of worker's compensation and unemployment benefits that you receive can't exceed the average weekly wage in your base period.
