Earnable Compensation

What is Earnable Compensation?

Earnable compensation is defined as the full regular compensation payable to a member for full normal working time. TRS members contribute the equivalent of 6.00% of their earnable compensation to TRS by payroll deduction. For those members with dates of membership 7/1/1996 and after, the IRS places limits on the amount of compensation that can be reported to TRS in a fiscal year (July 1 to June 30). See the Annual Earnable Compensation link to the right for more information.

To assist Employers with an understanding of what is and is not earnable compensation, the following information is offered. However, the following list is not all inclusive. If you have questions regarding the inclusion or exclusion of a financial component of an individual’s salary as it relates to earnable compensation for retirement purposes, please contact TRS for assistance.

Earnable Compensation Subject to TRS Contributions:

  • The full regular gross compensation payable to a member for his or her full normal working time. This gross compensation includes regular supplements included in each member’s written contract.
  • Tax sheltered annuities.
  • Regular compensation paid to a member while on sick, personal, or annual leave.
  • Deferred summer compensation earned in a TRS covered position.
  • Deferred summer compensation due to a deceased member’s estate.
  • The full regular gross compensation payable to a member for all working time during the summer months in a TRS-covered position.
  • Compensation received for employment under ‘extended day’ or ‘extended year’ written contracts.

Earnable Compensation NOT Subject to TRS Contributions:

  • Any and all compensation payable to a member for work performed over and above full normal working time. Normal working time is established by the employer.
  • Compensation for overtime, travel allowances, or salary for a secondary position.
  • Compensation payable for employment that is less than one-half time.
  • Compensation payable to an employee, who is a TRS retiree, who also elected to suspend retirement benefits rather than terminate retirement benefits while re-employed. The Retirement Services Division of TRS should be contacted on an individual basis to verify the status of all retirees who are employed in any capacity.
  • Compensation payable to members who are at least 65 years of age, who have at least 40 years of service, and who have not signed a waiver for continuation of member contributions (Waiver of 65/40 Mandatory Requirements Form).
  • Compensation payable to members who have at least 40 years of service and who have signed an Election to Discontinue Monthly Contributions Form.