What is regular compensation?
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