Self-employed persons who receive their "wages" in the form of commissions, report their net earnings just as for any other type of earnings. For example, the insurance agent uses his care and telephone in the course of his business. If it is determined that he is self-employed as an independent contractor, his business expense such as automobile and telephone costs is deductible from his gross income and he should report only his net income as earnings. But when it is determined that he is an employee, he should not deduct his car and telephone expenses when reporting earnings since these expenses are considered when the rate of commission is established.
http://www.edd.ca.gov/uibdg/Total_an...t_TPU_4602.htm