30-Plus 2 percent deduction calculation MTRS is expecting
- Knowledge Assistant
How does MTRS require the 2% over 30k deduction to be calculated?
- Payroll
- Massachusetts
- MA Retirement
- 2% over 30k
Informational
From https://mtrs.state.ma.us/service/contribution-rates-explained/ -
Employees who establish membership on or after 1/1/1979 and who are not participating in RetirementPlus contribute an additional 2% on all earnings over $30,000. This deduction is also known as the 30-plus deduction.
30-plus deductions are calculated on a pay period basis by taking all regular compensation on a pay date, subtracting the 30-plus exemption amount based on the member’s pay schedule (see table below) and then multiplying the result by two percent. (Note: Members who coach at a school district other than the one in which they qualify as a teacher, are required to make 30-plus contributions on all coaching pay in their secondary district if they earn more than $30,000 annually with their primary employer.)
The 30-plus (2%) deduction calculation formula
Regular compensation for pay period – 2% exemption amount = Earnings subject to 2% deduction
Earnings subject to 2% deduction x 2% = Amount due for 2% deduction
For example, Mary earns a base salary of $52,000 per year, and this year is also receiving a longevity payment of $2,000; she is paid in 26 bi-weekly payments. On this particular pay date, she is receiving her normal bi-weekly pay as well as the full $2,000 longevity payment, making her total compensation amount $4,000. Using the exemption amount for a 26 bi-weekly pay schedule (listed in the following section) the amount due for Mary’s 2% deductions would be $56.92, as shown below.
$4,000.00 – $1,153.85 = $2,846.15
$2,846.15 x 2% = $56.92
30-plus (2%) deductions exemption amounts, per pay date, by common pay schedules
Weekly
52 pays (12 months or LS) $576.92
42 pays (10 months) $714.29
Bi-weekly
26 pays (12 months or LS) $1,153.85
22 pays (10 months) $1,363.64
21 pays (10 months) $1,428.57
Semi-monthly
24 pays (12 months or LS) $1,250.00
20 pays (10 months) $1,500.00
For additional information on the 30-plus deduction and how to calculate it, see PERAC’s Memo #43 of 1999.