Marcia Hultman

Cabinet Secretary

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Labor Market Information Center

How is labor market information used to calculate the

maximum weekly unemployment benefit amount?

Each year, the Labor Market Information Center determines what the maximum unemployment insurance benefit will be, based on the methodology set forth in South Dakota Codified Law 61-6-2. That law specifies the weekly unemployment insurance benefit in South Dakota for each fiscal year is 1/26th of the wages paid to the claimant in the highest quarter of the claimant's base period but not to exceed an amount equal to fifty percent of the average weekly wage in covered employment in South Dakota for the calendar year preceding that fiscal year. (If the computed amount includes cents in the future, the number is rounded to the next lowest dollar amount.)

The average weekly wage in South Dakota is computed by dividing the sum of the total wages of workers covered by unemployment insurance, as reported to the Department of Labor and Regulation, by the average number of workers covered by unemployment insurance (which is the statistic known as average annual pay, explained in more detail below), then dividing the result by 52 (since there are 52 weeks in a year).

For more information on how weekly and maximum unemployment benefits are determined, visit the Unemployment Insurance Division's portion of this website. For information specifically on what the minimum weekly unemployment benefit is based on, see South Dakota Codified Law 61-6-6.

About Average Annual Pay

Average annual pay (available on this website) produced by the Quarterly Census of Employment and Wages (QCEW) program is computed by dividing total annual pay of employees covered by unemployment insurance programs by the average monthly number of these employees.  In addition to salaries, average annual pay data include bonuses, the cash value of meals and lodging when supplied, tips and other gratuities, and, in some states, employer contributions to certain deferred compensation  plans such as 401(k) plans, and stock options.  Monthly employment is based on the number of workers who worked during or received pay for the pay period including the 12th of the month.  With few exceptions, all employees of covered firms are reported, including production and sales workers, corporation officials, executives, supervisory personnel, and clerical workers. Workers on paid vacations and part-time workers also are included. 

Average annual pay is affected by the ratio of full-time to part-time workers as well as the number of individuals in high-paying and low-paying occupations.  When comparing average annual pay levels between industries and/or states, these factors should be taken into consideration.  Annual pay data only approximate annual earnings because an individual may not be employed by the same employer all year or may work for more than one employer.  Also, year-to-year changes in average annual pay can result from a change in the proportion of employment in high- and low-wage jobs, as well as from changes in the level of average annual pay.