Understanding how to report the correct pay rate helps ensure accurate benefit calculations.

• Pay rate is the amount an employee earns for a unit of time, such as hourly or a pay period.
• Pensionable wages represent the amount of retirement-eligible pay the employee earned during the pay period.

These two amounts are not always the same. For example, if a member has other pay events such as unpaid leave, overtime, or a comp time payout, the pensionable wages reported for that pay period may be different from the amount that should be entered in the pay rate field.

Example: An employee earns $2,000 in regular pay and $250 in service retention pay per pay period, for a total pay rate of $2,250.

During the pay period, the employee may:

• Take unpaid leave, or
• Receive a comp time payout

These events may change the pensionable wages earned for that pay period. However, the pay rate remains $2,250 per pay period and should be reported as that amount in the Pay Rate field.

• Accurately reporting the pay rate helps ensure correct benefit calculations and premium billing.
• For employees with unpaid leave events, such as FMLA, that count toward salary and service credit, the pay rate helps determine the salary credited to the employee during the leave period.
• It is also used to calculate the correct long-term disability premium to collect when an employee is on a leave of absence.

When calculating the pay rate, include all recurring pay components listed under the Pay Parameters tab in the ESMT, such as:

• Regular pay
• Service or retention pay
• Shift differentials
• Security differentials

• Enter the employee’s rate of pay based on their pay cycle.
• Include all recurring pay components when calculating the pay rate
• Review the Pay Parameters tab in the ESMT to confirm recurring pay components.
• Pay rate and pensionable wages may differ.