Unemployment Insurance Handbook for Employers (UCB-201-P)
Section 1 - Benefits

PART 6 - Wages and Other Kinds of Income

A. Definition of Wages

The definition and treatment of wages and other kinds of income can vary, depending on whether they apply to the base period or the benefit year.

Base Period Wages

Base period wages are the wages for covered employment paid during the claimant’s base period that are used to determine whether a claimant qualifies for unemployment benefits. If the claimant does qualify, these wages are also used to determine how much the claimant is entitled to receive during his/her benefit year. (See Part 3 for more information about base period wages.)

Benefit Year Wages

Benefit year wages are the wages that a claimant earns during his or her benefit year while filing claims for partial unemployment benefits. They include wages for both covered and excluded employment.

Reporting Wages

When the claimant files a weekly claim certification for a benefit payment, (s)he must report the gross amount of wages earned from all employers for all work performed in that week. The wages must be reported when earned; it is immaterial when or if the wages are paid.

In addition to wages earned for work performed, claimants must also report any holiday, vacation and/or dismissal/severance pay assigned to the week being claimed. These payments, as well as other types of income, are treated as wages when specific requirements are met. The requirements for each type of payment are listed in the chart below.

Taxable Wages

Taxable wages are wages for covered employment that must be reported to the Department and on which UI taxes must be paid. See Section 2, Part 3 for more information about taxable wages.

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B. Treatment of Wages and Other Types of Income in the Base Period and the Benefit Year

The following chart provides a detailed explanation of what types of income/payments constitute wages for both the base period and the benefit year.

Type of Pay When Treated as Base Period Wages When Treated as Benefit Year Wages
Wages for work performed

If PAID in the base period, includes:

  • Tips
  • Bonuses*
  • Incentives
  • Overtime
  • Commissions
  • Value of "payment in kind" (goods or services in lieu of wages)
  • "Reasonable value" of services performed by an officer of an S Corporation if a lesser amount was actually paid.

Base period wages also include those wages that legally should have been paid in the base period but which were not paid as the result of a controversy, insolvency proceeding under Chapter 128 or a bankruptcy proceeding under 11 USC 101.

*i.e. Bonuses for productivity, attendance, length of service, profit sharing, etc.

If EARNED in a week being claimed, includes:

  • Tips
  • Bonuses*
  • Incentives
  • Overtime
  • Commissions
  • Value of "payment in kind" (goods or services in lieu of wages)
  • "Reasonable value" of services performed by an officer of an S Corporation if a lesser amount was actually paid.

*i.e. Bonuses for productivity, attendance, length of service, profit sharing, etc.

Apprenticeship Pay

Always included if paid in the base period.

Always treated as wages and reportable in the week the wages were earned.

If the employee is paid his/her regular hourly rate of pay for time attending training, the wages are earned the week(s) of training.

If the employee receives an increased hourly rate of pay for hours of actual work as a means to pay the employee for training ("add-on" wages), the wages are earned in the week the employee works, not the week(s) the employee is in training.

If the "add-on" wages are only payable if the employee completes the training, the wages are earned the last week of training.

Back Pay

Retroactive wage adjustments for work performed are included as base period wages in the quarter in which they were paid.

However, a back payment of wages awarded for a period in which no work was performed is included as base period wages in the quarter in which they would have been paid during the base period, but only if:

  • the back pay was awarded under state law, federal law or under a collective bargaining agreement, and
  • the payment for the back pay is made within 104 weeks after the start of the earliest week in the settlement or award.

A settlement in lieu of back pay or an award that is for punitive damages or damages other than loss of pay, having no clear or direct relationship to the work and wages that would have been earned during the period in question is not considered back pay wages.

Retroactive wage adjustments for work performed are reportable wages for the week in which they were earned.

However, a back payment of wages awarded for a period in which no work was performed is treated as wages for the week the work would have been performed, but only if:

  • the back pay was awarded under state or federal law, or under a collective bargaining agreement, and
  • the payment for the back pay is made within 104 weeks after the start of the earliest week in the settlement or award.

A settlement in lieu of back pay or an award that is for punitive damages or damages other than loss of pay, having no clear or direct relationship to the work and wages that would have been earned during the period in question is not considered back pay wages.

Cafeteria Plans under S.125(b)

Cash options always included if paid in the base period. Pre-tax salary deductions and payments are not reportable for tax purposes but can be included as base period wages upon request from the claimant, so employers must keep an accurate record of these deductions/payments.

Note: For new claims filed 09/29/13 and later pre-tax salary deductions and payments are no longer considered base period wages and employers are no longer required to keep record of these deductions/payments. Cash options and monies withheld under a 401(k) plan are taxable and should be reported.

Always treated as wages and reportable in the week the wages were earned from which the deductions were made. 

Elected and Appointed Officials Pay (Government Units and Indian Tribes)

Not included as base period wages.

Always treated as wages and reportable in the week the wages were earned.

If paid a monthly salary:

  • multiply the monthly amount by .2308 to determine the amount to report each week.

If paid a yearly salary:

  • divide the yearly amount by 52 to determine the amount to report each week.
401K Payroll Deductions

Always included if deducted from wages paid in the base period.

Always treated as wages and reportable in the week the wages were earned from which the deductions were made.

401K Pension Payments

See Pension Payments

Holiday Pay

Always included if paid in the base period.

Treated as wages for a given week only if it is "definitely payable" no later than Wednesday of the week following the holiday, except for holidays that fall during the week that includes Christmas Day. For holidays that fall in the week that includes Christmas Day, the holiday pay is treated as wages only if it is definitely payable within 9 days of the week that includes the holiday.

"Definitely payable" means that the claimant’s right to such pay is final.

Holiday pay includes pay for individual or personal holidays, in addition to recognized legal holidays.

On-Call and Show-up Pay

Always included if paid in the base period.

Always treated as wages and reportable in the week the wages were earned.

Pension Payments (Including 401K Pension Payments)

Not included as base period wages.

Never treated as wages. However, benefits can be reduced as the result of a pension payment. See Part 7, Item L for more information about this eligibility issue.

Room and Board

Treated as base period wages unless provided by the employer because it is more convenient and efficient for the claimant to live on-site.

Treated as wages for a given week unless provided by the employer because it is more convenient and efficient for the claimant to live on-site.

Self-Employment Income

Not included as base period wages.

Not reportable as wages. However, self-employment can raise an eligibility issue. See Part 7, Item R for more information about this eligibility issue.

Sick Pay

Treated as base period wages only if:

  • it is paid directly by the employer to the claimant, not by an insurance carrier, and
  • it is paid at the claimant’s usual rate of pay.

Treated as wages only if:

  • it is paid directly by the employer to the claimant, not by an insurance carrier, and
  • it is paid at the claimant’s usual rate of pay.
Social Security

Not included as base period wages.

Never treated as wages and do not reduce benefits. See Part 7, Item L for more information.

Vacation and Dismissal (Severance) Pay

Always included if paid in the base period.

Treated as wages for a given week if:

  • the pay was definitely allocated or assigned to a particular week and definitely payable (so that nothing could prevent payment) by the close of that week; and
  • the pay was assigned at the claimant's approximate weekly wage rate or at a rate set forth by union agreement or by a company practice which has been consistently used; and
  • the claimant had due notice of the allocation (i.e., by letter, posted notice, union agreement, etc.) by the close of the week.
Worker’s Compensation

Wages that would have been paid in the base period but were not paid due to a work-related injury which resulted in the payment of temporary total or temporary partial disability payments under Wisconsin or federal law are included as base period wages.

(Note: Permanent partial disability worker’s compensation payments are not included as base period wages.)

If you are reporting a claimant’s receipt of worker’s compensation, please provide the period covered, along with the name of the insurance company responsible for the payment.

Worker’s compensation payments made under Wisconsin or federal law have the following effect on a week being claimed for unemployment benefits:

  • If the claimant receives a temporary total disability worker’s compensation payment for a whole week, the claimant is not eligible for any UI payment for that week.

  • If the claimant receives a temporary total or temporary partial disability worker’s compensation payment for part of a week, this payment is treated as wages.

If you are reporting a claimant’s receipt of worker’s compensation, please provide the period covered, along with the name of the insurance company responsible for the payment.

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C. Determining the Amount of Benefits to Pay When the Claimant Reports Wages and/or Other Income on a Weekly Claim for a Benefit Payment

The department must add all benefit year wages for a given calendar week together to determine the amount of unemployment benefits payable to the claimant for that week.

A calendar week for UI purposes always starts on Sunday and ends on Saturday. If a shift that is started on Saturday is not finished until Sunday, all wages earned during that shift are reportable to the calendar week that includes the Saturday.

Any other claimant who reports wages and/or other types of income on a weekly claim for a benefit payment may be entitled to full, reduced or no benefits for that week, depending on the total amount of wages earned and other payments to be treated as wages for the week. The amount of benefits payable for a week of partial unemployment is computed by applying the following "partial wage formula":

  1. Subtract $30 from the gross wages.
  2. Multiply the remainder by .67 (67%).
  3. Subtract the product (including cents) from the claimant’s weekly benefit rate.
  4. Round the remainder down to the nearest whole dollar. This is the amount of partial UI benefits payable for the week.

NOTE: The smallest UI benefit payment that we will pay is $5, so if the calculation results in an amount that is less than $5, no payment is made.

Example

Weekly Benefit Rate (WBR) = $200.00
Gross Wages = $250.00

Minus $30.00

Multiplied by .67 = $147.40
WBR minus $147.40 = $52.60
Round down to nearest dollar = $52.00

             $52.00 is the amount of benefits payable for the week.


Maximum Weekly Earnings

The Maximum Weekly Earnings Chart shows the highest amount (gross earnings) a claimant can earn in a week and still qualify for a minimum UI payment ($5.00) using the formula explained above. This amount is called the "maximum weekly earnings" amount. The chart shows the maximum earnings amount for each potential benefit rate. Effective week ending October 27, 2012 and later, no benefits are payable for any week in which a claimant earns wages and/or receives or will receive holiday, vacation, dismissal or sick pay exceeding $500 in the week.


Updated: September 27, 2013