Partial year salary limit calculations

The information on this webpage describes how partial year salary limits are calculated, with examples. Go to the Partial year salary limits webpage to read more about what the limits are and how they work.

Beginning January 1, 2024, the formula to calculate a partial-year limit is:

To clarify: Any month in which you have active membership is counted as a month in the numerator. The denominator is always 12.

• For example, 7 months of active membership ÷ 12 months = 0.583333.
• 0.583333 × annual salary limit = prorated salary limit for 7 months.

You do not have to be employed a full month for it to count as active membership (see examples below).

Your PERS-participating employer is responsible for designating your position as “active” and “qualifying.” Note that active membership continues through what your employer sends to PERS as your “termination date,” not your “last day of service.”

Notes for special situations:

• Any partial month is counted. For instance, if you were employed on January 1 through August 3 of a given year, you would have eight months of active membership in that year.
• Months of leave without pay (LWOP) during active membership are counted.
• Any full month (when your employer has not officially “terminated” you in the PERS system) that you had active membership, even if you had no hours or salary reported, is counted.
• Full months of “nonqualifying” employment do not count.
  
  

Example 1: Less than 12 months of active employment

An existing PERS member is hired with a new PERS-participating employer on February 27, 2024, in a qualifying position. He subsequently terminates employment on August 3, 2024. He has seven months of active membership during the 2024 calendar year (both February and August are counted).

His 2024 salary limit is $135,902.59. This number would be used for employee and employer contributions and possibly in the calculation of final average salary.

Example 2: A new member

A new public employee started employment on December 10, 2023, in a qualifying position and continues to work through all of 2024 and into the next year. Because she has to complete a six-month waiting period before establishing membership, the first six months of her employment do not count as months of active membership. Her “contribution start date” (i.e., “membership date,” as shown on her member annual statement) is July 1, 2024. Her IAP contributions begin on July 1, 2024, once membership is established. By continuing to work for the entire 2024 calendar year, she has six months (July through December) of active membership in 2024.

Her 2024 salary limit is $116,488. This number would be used for determining employee and employer contributions and possibly in the calculation of final average salary.

Note: The salary that she earned during her six-month waiting period would not be counted toward the $116,488 limit because the waiting period does not count as months of active membership.

Example 3: Partial year and December termination

An existing member is employed with a PERS-participating employer in a qualifying position on August 25, 2024, and subsequently terminates employment on December 15, 2024. He receives his final paycheck on January 15, 2025. The member has five months of active membership in 2024 (August through December).

The salary paid on January 15, 2025, would be included with his 2024 salary. His 2024 salary limit is $97,073.41. This number would be used for employee and employer contributions and possibly in the calculation of final average salary.