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Salary limit: information for employer reporters

Oregon law limits the amount of an employee or working retiree's salary that can be reported as "subject salary" each year. The limit helps control employer contribution rates by putting a cap on:

  • The amount of salary that can be included when calculating an employee's PERS retirement benefits.
  • The amount of salary on which an employer must pay contributions.
  • The amount a high earner must contribute to their Individual Account Program (IAP) account.

The limit does not affect how much salary an employee is paid; it only affects the way that money is reported.

The salary limit amount is updated each January to reflect changes in inflation and cost of living.

2024 salary limit $232,976/year
2023 salary limit $225,533/year
2022 salary limit $210,582/year

To find annual salary limits for previous years, reference the Salary Limits for Employers document.

How to know if an employee reaches the salary limit
If you submit a Detail 2 Wage and Service record for an employee that puts them over the salary limit for that calendar year, EDX flags the wage record with an error. To correct the record, subtract the overage from the Subject Salary (Regular) and/or Subject Salary (Overtime) field and enter it in the Non-Subject Salary field. If an employee reaches the limit before the end of the year, continue to report all their salary as non-subject through the end of that calendar year. 

Calculating a partial-year salary limit
When an employee (including a rehired retiree) is employed for less than 12 months in a calendar year (e.g., they are hired partway through the year or retire partway through the year), the salary limit is prorated based on how many months they worked. 

To learn more, go to the "Prorating Partial-Year Salary Limits by Month" section below.

Subject salary versus non-subject salary
PERS subject salary is used to determine:

  • Member Individual Account Program (IAP) contributions.
  • Employer contributions to fund the pension program.
  • The final average salary (FAS) used in calculating retirement benefits under formula methods.

Non-subject salary does not earn retirement benefits; therefore, employers are not charged their contribution rate on non-subject salary and employees are not charged the monthly 6%-of-salary IAP contribution.

Lump-sum vacation payout
At retirement, Tier One and Tier Two members may take a lump-sum payment for some of their remaining vacation hours and have that payment included in their subject salary. Because this value is included in subject salary, a lump-sum vacation payment could cause them to exceed the salary limit amount.

Unused sick leave program
For employers who participate in PERS unused sick leave program (i.e., you allow employees to have a portion of their leftover sick leave hours included in their retirement benefits calculation), the salary limit does not affect the value of unused sick leave. Unused sick leave is not considered "subject salary."

To learn about the unused sick leave program and how to calculate unused sick leave, read the article "Calculating Unused Sick Leave" in the May 2022 Employer News.

Working retirees
Although retirees are no longer active members, employers are responsible to pay contributions on working PERS retirees' salaries as if they were active members. Therefore, the salary limit does affect working retiree salaries.

Prorating partial-year salary limits by month

To calculate an employee's salary limit for less than a full calendar year of employment, refer to the equation and table below.

Salary limit equation

Months of active membership for the employee (i.e., any month in which the employee had at least one day of active membership).

Divide by 12 (months in a year). Round the number off to six decimal places.

Multiply by annual salary limit. Multiply the decimal number by the annual salary limit.

(Months of active membership / 12) x $232,976 = 2024 partial-year salary limit

2024 Partial-Year Salary Limits Table

Months of active membership













Months worked ÷ 12













Salary limit













Example 1: Tier Two retirement
Tom has decided to retire after 30 years as a police lieutenant. In calculating his final average salary, his employer uses his three most recent full years (which are also his highest paying years). Tom's annual salary for his three years is limited by the salary limit in effect for each year (numbers are rounded off to the nearest dollar):

Year Gross salary Annual salary limit Amount included in calculating FAS Amount reported as non-subject salary
















*Includes a lump-sum vacation payout.

Example 2: Quitting after five months
Existing OPSRP member Jill works January 1 through May 4 and then quits. To calculate her partial-year salary limit for that year, multiply (5 ÷ 12) (which is 0.416667) by that year's salary limit.

Example 3: Employee who works for multiple employers
Employer Jorge is surprised to receive a suspended record with an error message that says his employee has surpassed the annual salary limit. He calls his ESC representative and learns that his employee works for two other employers, and the combined salaries put the employee over the salary limit. Jorge works with his ESC rep to correct the record. 

Example 4: New member
Tiana, a new public employee, started employment on December 10 in a qualifying position and continued to work through all the next year. Because she had 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. Therefore, Tiana has six months (July through December) of active membership that year.

Note: The salary Tiana earned during her six-month waiting period would not be counted toward the salary limit because the waiting period does not count as active membership.

Example 5: Partial year and December termination
Ian, an existing PERS member, is employed with a PERS-participating employer in a qualifying position on August 25 and subsequently terminates employment on December 15. Ian receives his final paycheck on January 15. He has five months of active membership with that employer (August through December).
The salary paid on January 15 is included with Ian's salary for the previous year because it was earned in the previous year.

Example 6: Partial year by separation from employment and Tier One lump-sum vacation payout
Seo-Jun, an existing Tier One member, is employed with a PERS-participating employer in a qualifying position. She terminates employment on February 27 in order to retire March 1. She has two months of active membership for that year. Seo-Jun's yearly salary is normally under the annual limit. Seo-Jun receives her final check on March 15, which contains $20,000 of a lump-sum vacation payout as part of her subject salary. Regular salary is $10,000 for each month of January and February, which, combined with her lump-sum payout, puts her over the two-month salary limit.

The amount of Seo-Jun's salary that is over the limit must be reported as non-subject salary.

Note: For OPSRP members, lump-sum vacation payouts and other lump-sum payments are not included in subject salary and can be reported as they usually would be. Employers should use the Payment Categories chart to determine subject versus non-subject salary, especially which lump-sum payments can be included for Tier One and Tier Two members.

Example 7: Partial year by separation followed by working retiree employment
Jax (they/their) is employed with a PERS-participating employer in a qualifying position and terminates on January 31 to retire on February 1. They receive their final regular paycheck on February 25 in the amount of $6,000. Their one month of active membership is under the salary limit and is reported as subject salary.

Jax returns to work for a PERS-participating employer as a retiree on September 1 and works until October 31. They are paid $36,000 for September and October. Only the September and October pay needs to be considered for salary limit because (1) the January pay was already processed when Jax retired and (2) working retiree pay is processed separately from regular employee pay.

Although retirees are no longer active members, employers are responsible to pay contributions on retirees' salaries as if they were active members. Therefore, retirees are considered active members for Salary Limit purposes.


  • Qualifying employment: A position that requires 600 hours/year or more (or several positions added together) and qualifies for PERS benefits.
  • Non-qualifying employment: A position that requires equal to or less than 599 hours/year (or several positions added together) and does not qualify for PERS benefits.
  • Active member: A PERS member who is still working and not yet retired.
  • Contribution start date: The first day of a new employee's PERS membership after they have successfully completed their six-month waiting period.
  • Subject salary: Salary that is subject to employer contributions (i.e., salary earned in a qualifying position).
  • Non-subject salary: Salary that is not subject to employer contributions (i.e., salary earned in a non-qualifying position or salary over the salary limit).

Partial-year salary limits 2021-2023

Prior to Senate Bill (SB) 1049 (2019), OPSRP was the only PERS pension plan that had PERS-imposed salary limits in place. Effective January 1, 2020, SB 1049 not only reduced the previous annual salary limit, but it also expanded it to apply to members of the Tier One and Tier Two pension plans.

See Employer Announcement #89 (2014) for prior reporting of partial-year limits for years before 2020. Before 2020, only OPSRP members were impacted by a partial-year salary limit. To see salary limits before 2020, reference the Salary Limits for Employers document.

Tier One, Tier Two, and OPSRP Partial-Year Salary Limits: 2020 to 2022

Number of Months Worked













Full Year

2023 $18,794.34 $37,588.91 $56,383.25 $75,177.59 $93,972.16 $112,766.50 $131,560.84 $150,355.41 $169,149.75 $187,944.09 $206,738.66 $225,533.00
2022 $17,548.43 $35,097.07 $52,645.50 $70,193.93 $87,742.57 $105,291.00 $122,839.43 $140,388.07 $157,936.50 $175,484.93 $193,033.57 $210,582.00
2021 $16,477.43 $32,955.07 $49,432.50 $65,909.93 $82,387.57 $98,865.00 $115,342.43 $131,820.07 $148,297.50 $164,774.93 $181,252.57 $197,730.00
2020 $16,249.94 $32,500.07 $48,750.00 $64,999.94 $81,250.07 $97,500.00 $113,749.94 $130,000.07 $146,250.00 $162,499.94 $178.750.07 $195,000.00