Q: The bi-weekly gross salary of one of your employees, Jane Smith, totals $1,500. Of this amount, $430 helps pay her dependent care account for her three-year-old child. What salary do you report on the monthly report?
A: Although Jane Smith’s taxable salary is reduced by the amount of her dependent care deduction, you would report her gross salary before the deduction — $1,500 — to us.
Q: You offer John Doe $1,500 as an inducement to retire. John agrees to your offer. Should you report this money on the monthly report? 1
A: No. Payments made in anticipation of retirement or as an inducement or incentive to retire, including payments an employee elected to take in either a lump sum or over a period of time, are never reportable.
Q: Last month Jane Doe worked 15 hours of overtime, for which she received an additional $225. Should you report this on the monthly report? 2
A: It depends on Jane’s tier. Overtime is reportable on your monthly report, but there are limitations for Tier 5 and 6 members.
For Tier 5 and 6 Employees’ Retirement System (ERS) members, overtime is capped for the calendar year. Overtime payments that exceed the cap are not reportable. In addition, you should not collect (or report) contributions on any overtime payments above the cap.
The overtime cap for Tier 5 ERS members increases by 3 percent each calendar year. Please refer to our Tier 5 overtime limitation chart.
The overtime cap for Tier 6 ERS members is adjusted for inflation based on the annual Consumer Price Index (CPI). Please refer to our Tier 6 overtime limitation chart.
Pensionable overtime worked by Tier 5 and 6 Police and Fire Retirement System (PFRS) members is capped at 15 percent of the member’s salary. Overtime payments that exceed the cap are not reportable. In addition, you should not collect or report contributions on overtime payments above the cap.
Q: John Smith runs a program for the police in which cognitively impaired inmates are frequently visited by specially trained dogs. Given the type of work he does, John Smith is eligible to receive lump sum recurring payments for the care and maintenance of the animals. Should you include these payments on the monthly report?
A: Yes. You should report this on your monthly report.
Q: Alan Smith is a member of Tier 2 who was injured on the job. While he’s out of the office, Workers’ Compensation is paying him directly; he is not receiving any salary from you. At the end of the month, do you report him?
A: No. You should never report days worked or salary for members in Tiers 2 through 6 who are receiving payments directly from a Workers’ Compensation carrier.
1 Updated as of 2/14
2 Updated as of 11/17