Compensation Subject to SDRS Contributions
Compensation includes all payments for services rendered by an employee. All earnings and wages, salaries, fees, and wages-in-kind must be reported regardless of the source of the funds. If your unit has the final authority to hire, direct, and fire the employee, that employee's compensation must be reported, even if it is funded by another entity, such as the federal government.
Besides the employee's regular salary, examples of other compensation include:
- Overtime pay
- Vacation pay and sick pay (exception: lump-sum payouts of leave balances at termination)
- Back pay for services performed in a prior period
- Longevity pay
- Wages-in-kind: value of meals and lodging furnished to an employee if included on employee's W-2; if travel, meals, or lodging expenses are reimbursed to the employee, they are not considered compensation
- Tax-sheltered annuities
If you ever question whether payments should or should not be reported to SDRS, please contact the SDRS office toll-free at 1-888-605-SDRS (7377).