Are Unemployment Benefits Based on Previous Salary?

You must have earned a salary recently to get unemployment benefits.

You must have earned a salary recently to get unemployment benefits.

If you’re jobless but you were working and intend to return to work as soon as possible, unemployment benefits can help fill the financial gap while you hunt for a job. Each state sets its own criteria for awarding benefits. In general, you must be unemployed for some reason that's not your fault to receive unemployment benefits, such as if you were laid off because of cost-cutting measures by your former employer. Your previous salary will play a big role in determining both your eligibility and the amount of benefits you get.

Recent Work History

When you apply for unemployment benefits, the state agency looks at your work and income history during a base period. The base period is figured using your date of application, not the day you stopped working. A base period is usually the last five completed calendar quarters, with the fifth quarter excluded. Suppose you apply in July, August or September. Your base period works out to a 12-month period starting in April of the previous year and ending with March of the current year.

Salary and Eligibility

States usually set a minimum work requirement to qualify for benefits. For example, Virginia rules state that you must have earned a salary or wages in at least two of the base period quarters. In Ohio, you must have income from work for 20 or more weeks during the base period. There are also minimum earnings requirements. In Virginia, the minimum is $2,700 in two quarters. Ohio regulations say you have to average $233 per week during the minimum 20-week work period as of 2014.

Figuring Your Weekly Benefit

Each state has a formula for figuring your weekly unemployment benefit amount based on your salary or wages. Usually, the benefit is a fraction of your salary during all or part of the base period. For example, in Ohio your weekly benefit amount is 50 percent of the average weekly earnings for the weeks you worked during the base period. If you earned an average of $450, the weekly amount works out to $225. Also in Ohio, the maximum weekly payment is $418 if you have no dependents, $507 if you have one or two dependents and $564 when you have three or more dependents. Since each state is different, so check with your state unemployment agency to see exactly how your benefits are computed.

Getting Reduced Benefits

State rules typically say you must take work if it’s offered in order to maintain eligibility for unemployment benefits. Typically, your benefit amount is reduced when you earn money from working. A portion of the benefit amount is excluded when the deduction is figured. For instance, in Ohio, 20 percent of your benefit is excluded when a reduction for wages earned is calculated. Suppose your benefit amount is $450 and you get a part-time job paying $300 per week. Subtract 20 percent of $450, or $90, from $300. Then subtract the remainder of $210 from $450. Your benefit amount for the week drops to $245.


About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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