We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Insurable Earnings?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Insurable earnings are any types of earnings generated from insurable employment. As it relates to unemployment benefits, this would encompass any type of benefits that are paid to an employee in exchange for services rendered. Insurable earnings are often tendered as cash, but may also be provided in some other such as a benefit or gratuity.

The most common examples of insurable earnings have to do with the wages and salary provided to employees for services rendered. In terms of wages, the pay may be in the form of a fixed rate per hour of service, or based on the number of assigned tasks completed over the course of the pay period, a process that is sometimes called piecework. The provision of a salary, essentially a fixed amount of pay for each pay period, is also considered a type of insurable earnings.

Other forms of compensation also fit into the broad category of insurable earnings. Commissions and bonuses that are sometimes granted above and beyond wages and salary are included. Benefits such as pay for personal days, sick pay, and vacation time are also considered insurable for tax purposes. In some instances, providing room and board for employees would also fall into this category.

In terms of taxes, insurable earnings are generally subject to taxation. This makes it necessary for any form of the earnings to be reported to local, state, and federal tax agencies. Typically, the calculation of taxes due for a given period are based on the sum total of the wages, salaries, commissions and other forms of insurable earnings that are received by the employee during that specific pay period. Employers normally manage this reporting and calculation for each employee, withholding the appropriate amount of taxes and forward those taxes to the proper tax agency or agencies.

Identifying these benefits as insurable earnings is important, since the total amount of the compensation does have some impact on the amount of unemployment coverage and compensation that the individual may receive should he or she become unemployed under certain terms and conditions. While unemployment laws vary widely from one jurisdiction to another in terms of which events are eligible for unemployment compensation, calculating the compensation based on insurable earnings is very common. For this reason, employers are often required by law to report each type of earning as a separate line item on employee earnings statements or wage slips, making it easy to verify every type of relevant compensation tendered for the period under consideration.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By MrMoody — On Mar 05, 2012

@NathanG - You could always put that money in your 401K or a Health Savings Account which are both tax deductible. That would shelter it. But of course there are limits to what you can do with the money at that point. I don’t think there is a thing as tax free earnings, but you may want to increase your withholdings from each paycheck so that you owe less to the IRS.

By NathanG — On Mar 04, 2012

@Charred - I get a year-end bonus at my job and that’s subject to taxation, so even the bonus is not what it appears to be on paper. I can’t spend the full amount.

Isn’t there any kind of money that we can get which is not subject to taxation? In my opinion bonuses should not be considered as part of insurable hours; they are at the discretion of the employer.

He certainly is not obligated to pay them, and so they are not wages in the usual sense of the term.

By Charred — On Mar 04, 2012

@SkyWhisperer - Nothing escapes the IRS as far as taxes goes. Not only your wages, but your tips as well, are considered taxable as well, as should be obvious, if you’re a server at a restaurant or something like that. Be sure to keep track of your tips.

Your employer should do that but sometimes they don’t, especially if it’s all in cash. The IRS will notice, however, if you don’t report tips. They will be very suspicious when they get your return and it says something like you made $2 per hour (or whatever the base is for servers) and no tips. That’s a clear red flag and they’ll come knocking on your door in short order.

By SkyWhisperer — On Mar 03, 2012

While employment insurance earnings are important for unemployment benefits, there is a limit to how useful they are in that sense in my opinion. There is maximum insurable earnings limitation as I found out a few years back. Once you reach that maximum there is not much more that you can collect.

For example, when I got laid off I was paid $350 a week in unemployment benefits. Believe me, I made a lot more than that in my last salary, but that was the maximum amount. Of course it’s supposed to be a stop gap measure, I understand that; maybe some people can actually live on $350 a week but I couldn’t.

Fortunately I got a new job in relatively short order so I was able to move on with my life. But my point is that even if I had been making six figures at my last job I still think I would have gotten $350 a week.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.