How to Report Part-Time Earnings on Texas Unemployment

The 25% Earnings Rule Explained

Texas encourages claimants to take part-time work while collecting unemployment. The state uses a partial benefit formula that lets you earn some money without losing your entire weekly payment.

Here is how it works: you can earn up to 25 percent of your Weekly Benefit Amount in any given claim week with zero reduction to your unemployment payment. Once your gross earnings exceed that 25 percent threshold, benefits are reduced — but not dollar for dollar from the first cent. The formula is:

Partial Benefit = (1.25 × WBA) − Gross Earnings

If your WBA is $400, the math looks like this:

• Earn $80 (under 25% of $400 = $100): You receive your full $400 benefit. Total income: $480.
• Earn $200 (over 25% but under 125%): Partial benefit = ($500) − $200 = $300. Total income: $500.
• Earn $500 or more (at or above 125% of WBA): Benefit drops to $0 for that week. Your work earnings replace the benefit entirely.

The 125% cap is the breakeven point. Any gross earnings at or above 1.25 times your WBA means no benefit payment for that week.

Report Earnings in the Week You Worked, Not When You Got Paid

This is where most reporting errors happen. TWC requires you to report gross earnings for the specific Sunday-through-Saturday week in which you performed the work — regardless of when the paycheck arrives.

If you worked Monday through Wednesday of Week 1 and your employer pays you the following Friday in Week 2, those earnings belong to Week 1. Report them in the biweekly payment request that covers Week 1.

For hourly work, calculate gross earnings as total hours worked multiplied by your hourly rate, before any deductions for taxes, retirement contributions, or garnishments. TWC wants the gross figure — what you earned, not what you took home.

When entering the amount on your payment request, round down to the nearest whole dollar. Earnings of $150.85 are reported as $150.

What Counts as Reportable Work

TWC defines reportable work broadly. All of the following must be reported:

• Full-time or part-time employment
• Temporary or day labor assignments
• Freelance, gig, or independent contractor work
• Sales commissions and tips
• Paid orientation or training with a new employer
• Self-employment income (report net profits: the amount remaining after all expenses)

If you performed any work during a claim week — even a single hour — answer "yes" to the work question on your payment request and report the gross earnings.

Common Mistakes That Trigger Overpayments

Reporting earnings in the wrong week. Matching earnings to the pay date instead of the work date is the most frequent error. TWC audits can compare your reported weeks against employer payroll records, and mismatched weeks trigger overpayment assessments.

Forgetting to report cash or gig work. Casual labor, side gigs, and cash payments are reportable. TWC cross-references quarterly employer tax filings and, for self-employment, IRS records. Unreported earnings discovered after the fact are treated as potential fraud.

Reporting net pay instead of gross. Always report the pre-tax, pre-deduction amount. If your check shows $380 after taxes but your gross pay was $450, report $450.

Not reporting a week where you worked full hours. Even if your earnings exceeded your WBA and you know the benefit will be $0, you must still report the work and earnings. Skipping the report entirely can flag your claim for an integrity review.

Keeping Records for Audit Protection

TWC's Benefit Accuracy Measurement unit conducts random audits of claimant records. Maintain your own log of every work week: the dates you worked, hours per day, gross earnings, employer name, and how you calculated the gross amount. Keep pay stubs or payment confirmations for at least one year after your benefit year ends.

If TWC contacts you about an earnings discrepancy, having organized records lets you respond quickly and accurately — which is the difference between a simple correction and an overpayment investigation.

The Filing for Unemployment in Texas guide includes an earnings calculator worksheet and a biweekly certification checklist that walks you through the reporting process step by step, so you report the right amount in the right week every time.

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