The term "wages" means all payments for personal services from all sources, including commissions and bonuses and the cash value of any payment in any form other than cash.
An employee's remuneration for personal services constitutes "wages" subject to taxation regardless of:
- Medium of Payment
The wages may be in cash, goods, board and lodging, working out a debt, etc. The reasonable cash value of the noncash payments are considered wages.
- Designation of Payment
Regardless of the labor or designation of the payment, it is wages. The payment may be designated as "wages," "salary," "bonuses," "commission," "profit sharing," "draws," "dividends," etc., but it will still constitute wages.
- Basis of Payment
The nature of wages is not affected by the fact that the work is performed on a piecework basis, job basis, a commission basis, or straight salary.
- Frequency of Payment
Payments made for personal services are wages whether paid on an hourly, daily, weekly, monthly, yearly, or otherbasis.
Notice is given each year regarding the amount of wages to be taxable for each employee. This amount (taxable wage base) is determined by the state's average annual wage in covered employment. An employer is not required to pay tax on wages of more than the annual base amount for any particular employee. The "excess" wages are reported on item 6 of the Employer Quarterly Unemployment Insurance Tax Report.
To obtain more information about unemployment insurance taxes, contact any Department of Labor tax representative. To find the tax representative nearest you, please consult the Tax Representatives directory.