What is regular compensation?

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Regular compensation is the portion of your salary that is subject to retirement contributions.

Examples of payments that are considered to be regular compensation:

  • base salary or other base compensation
  • payment for services performed
  • pre-determined, non-discretionary, guaranteed payments
  • paid to similarly situated employees
  • payment for the character of the work
  • payment for an employee’s length of service
  • payment for the time at which work takes place
  • educational incentives
  • payments for holding certification, licensing, training
  • payments made as a percentage of back pay

Examples of payments not considered to be regular compensation:

  • overtime
  • commissions
  • bonuses, other than cost of living bonuses
  • amounts derived from salary enhancements or salary augmentation plans
  • indirect, in-kind or other payments for such items as housing or lodging, travel, clothing allowances, and annuities
  • welfare benefits
  • lump sum buyouts for Workers’ Compensation
  • job-related expense payments
  • automobile usage
  • insurance premiums
  • dependent care assistance
  • one-time lump sum payments in lieu of or for unused vacation or sick leave
  • payment for termination, severance, dismissal
  • any amounts payable as premiums for working holidays (certain employees excepted)
  • early retirement incentives
  • any other payment made as a result of the employer having knowledge of the member’s retirement
  • tuition
  • payments in kind
  • all payments other than payment received by an individual from his employing unit for services rendered to such employing unit, regardless of taxability