Social Security earnings limit confusion with quarterly commission payments at 62 - how will SSA count my income?

The answer depends on how SSA counts the income, and generally they follow the "when paid, not when earned" rule. For wages (including commissions), they usually count income in the month you receive it, not when you technically earned it. So if your brother gets a large quarterly commission check in March, June, September, and December, those are the months where his income would spike above the earnings limit. I'd recommend he contact SSA directly about his specific situation, but generally the earnings test for early retirement is based on when you actually receive the money, not when you earned it.

sameee situation with my husbaand last year!!! SSA counts it for the month u GET PAID not when u earned it. they dont care bout the details just when the $$ hits ur account. his company wont need 2 break it down by month, just show the dates the checks were issued.

SSA claims rep here. This is a common question with commission-based workers. The rule is actually straightforward: for the earnings test, wages (including commissions) count when they're PAID, not when they're earned. There are only a few exceptions to this (like farming/self-employment income), but for a W-2 employee receiving commissions, it's the payment date that matters. So if your brother receives those quarterly commission checks in March, June, September and December, only those months would count the commission income. SSA will look at his pay stubs or direct deposit dates as verification. One thing to watch for: if he has a choice of when to receive commissions or can delay payments, any deliberate manipulation of payment timing to avoid the earnings test could be problematic.

Watch out for the yearly earnings total too, not just the monthly! In 2025 the annual limit is $27,120 if you're under Full Retirement Age all year. Even if your brother only has 4 months that exceed the monthly limit, they'll STILL withhold benefits if his total annual earnings exceed that amount. SSA withholds $1 in benefits for every $2 earned above the annual limit. They do the calculation both ways (monthly and annually) and use whichever is more favorable to you.

I went through HELL with this exact situation last year! The SSA kept giving me different answers depending on who I talked to. One person said commissions count when earned, another said they count when paid. I spent HOURS on hold trying to get a straight answer. Finally got through to a supervisor who confirmed it's when paid, not earned. But when I had to do my annual report, they still questioned my commission dates and I had to provide ALL my pay stubs. The whole system is a nightmare!! I recommend calling early in the morning right when they open - that's the only way I could get through.

Thanks everyone for the helpful responses. This makes our planning much easier. My brother will be just fine if they only count the commission in the actual months he receives the quarterly payments (March, June, September, December). Since he's applying in July, he'd only have 2 months over the limit for 2025 (September and December). That's much better than we feared! Should he mention this commission structure when he applies, or just deal with it when he files his annual report next year?

One more thing - make sure your brother keeps VERY detailed records of exactly when each payment was received and how much. When he files his annual report to SSA, having those records ready will make the process much smoother. The SSA can request verification from his employer, but having his own documentation ready will speed things up.

Something else worth mentioning: if your brother has already hit his 62nd birthday, he doesn't have to wait until July to apply. He can apply up to 4 months before he wants benefits to begin. So if he wants July benefits, he could apply now and specify July as his benefit start month. This gives SSA time to process the application, which can sometimes take a while. The first payment for July would arrive in August.

Just wanted to add a quick note about timing for anyone else in a similar situation - if your brother is planning to start benefits in July, he should also consider what his earnings will look like for the remainder of 2025. Since he'll only be collecting SS for 6 months this year (July-December), the monthly earnings test might actually work out better than the annual test would in future years. Also, when he does his initial application, they'll ask about expected earnings for the year. Make sure he gives them realistic estimates including those quarterly commissions - it's better to overestimate slightly than to have surprise income that triggers overpayments later. SSA hates having to claw back money they've already paid out!

I'm in a very similar situation with irregular commission income! One thing that really helped me was creating a simple tracking spreadsheet from the start. I track every payment date, amount, and type (regular salary vs commission) as soon as I receive it. When I applied for benefits, I brought printouts showing my payment history for the past 6 months and estimates for the rest of the year. The SSA rep was really appreciative that I had everything organized and it made the interview go much smoother. Also, don't stress too much about the earnings test calculations - once you get your first annual report form from SSA, it walks you through everything step by step. The key is just keeping good records from day one so you're not scrambling later to remember when you got paid what amount. Your brother sounds like he's in good shape if he's only looking at 2 months over the limit for 2025!

As someone who recently went through this process with quarterly bonuses, I can confirm what others have said - SSA definitely goes by payment date, not when the income was earned. One additional tip: when your brother applies, he should ask the SSA representative to put a note in his file about his quarterly commission structure. This way, when he does his annual earnings report, there's already a record that his income pattern was discussed upfront. It can help avoid questions or delays during the review process. Also, since he's starting benefits mid-year in July, he'll want to be extra careful about those September and December commission months. Even though it's only 2 months over the limit, make sure he reports those expected amounts during his application interview so there are no surprises. Good luck to your brother!