For members of Tiers 5 and 6, New York State Retirement and Social Security Law limits the amount of overtime pay included in the calculation of pension benefits. Overtime limits differ for the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS).
At the beginning of each calendar year, reset your employees' overtime earnings to $0.00 in your payroll system and begin tracking year-to-date totals if the automatic capping feature is not in effect yet. Report overtime above and below the limit using the appropriate earnings code (please note, the codes you use depend on whether the automatic capping feature is in effect). Do not withhold member contributions from earnings above the annual overtime limit.
Tracking and Reporting Overtime Earnings
Automatic Capping Feature in Retirement Online
Retirement Online automatically tracks year-to-date totals for overtime earnings and notifies you when a Tier 5 or 6 member reaches their overtime limit.
When Does Automatic Capping Take Effect?
You will have access to the automatic capping feature depending on:
- Whether you report ERS or PFRS members; and
- When you began submitting reports using enhanced.
Reporting ERS Members
If you submitted an enhanced report for your December 2024 report or earlier, the automatic capping feature is in effect for the ERS members you report.
If you begin submitting reports using enhanced during 2025, the automatic capping feature will take effect at the start of calendar year 2026.
Reporting PFRS Members
Retirement Online calculates a PFRS member’s overtime limit based on their pensionable, non-overtime earnings from the previous calendar year. Therefore, you must use enhanced reporting for a full calendar year for the automatic capping feature to take effect.
If you submitted an enhanced report for your December 2023 report or earlier, the automatic capping feature is in effect for the PFRS members you report.
If you began submitting reports using enhanced during 2024, the automatic capping feature will take effect at the start of calendar year 2026.
If you begin submitting reports using enhanced during 2025, the automatic capping feature will take effect at the start of calendar year 2027.
How Automatic Capping Works
- Report overtime earnings using the appropriate earnings code.
- Receive a warning message. Once a Tier 5 or 6 member reaches their overtime limit, you will receive a warning message when submitting your report.
- Refund member contributions. If your Report Summary has “Excess Withholdings,” go to the Improper Withholdings page for a breakdown of the amount owed to each employee.
- Stop withholding member contributions from overtime earnings above the limit for the remainder of the calendar year.
- Continue to report overtime earnings using the appropriate earnings code. With the automatic capping feature, do not use the Non-Pensionable Overtime (NOT) earnings code.
If Automatic Capping is NOT in Effect
It is your responsibility to:
- Know the overtime limits and track year-to-date totals for overtime earnings.
- Report overtime earnings below the limit using the appropriate earnings code.
- Once a Tier 5 or 6 member reaches their overtime limit:
- Stop withholding member contributions from overtime earnings above the limit for the remainder of the calendar year.
- Report overtime earnings above the limit using the Non-Pensionable Overtime (NOT) earnings code, except for Private Entity Overtime (PEO) earnings, for the remainder of the calendar year.
ERS Overtime Limits
Tier 6
The overtime limit changes each calendar year based on the Consumer Price Index.
| Calendar Year | Overtime Limit |
|---|---|
| 2025 | $20,958 |
| 2024 | $20,459 |
| 2023 | $19,729 |
| 2022 | $18,233 |
| 2021 | $17,301 |
| 2020 | $17,067 |
| 2019 | $16,779 |
| 2018 | $16,406 |
| Fiscal Year | Overtime Limit |
|---|---|
| April 1, 2017 – December 31, 2017* | $12,036 |
| April 1, 2016 – March 31, 2017 | $15,721 |
| April 1, 2015 – March 31, 2016 | $15,608 |
| April 1, 2014 – March 31, 2015 | $15,490 |
| April 1, 2013 – March 31, 2014 | $15,261 |
| April 1, 2012 – March 31, 2013 | $15,000 |
| *Before January 1, 2018, the overtime limit was applied each State fiscal year (April 1 – March 31), so from April 1, 2017 – December 31, 2017, the overtime limit was prorated. | |
Tier 5
The overtime limit increases each calendar year by 3 percent.
| Calendar Year | Overtime Limit |
|---|---|
| 2039 | $35,348.48 |
| 2038 | $34,318.92 |
| 2037 | $33,319.34 |
| 2036 | $32,348.87 |
| 2035 | $31,406.67 |
| 2034 | $30,491.91 |
| 2033 | $29,603.80 |
| 2032 | $28,741.55 |
| 2031 | $27,904.42 |
| 2030 | $27,091.67 |
| 2029 | $26,302.59 |
| 2028 | $25,536.50 |
| 2027 | $24,792.71 |
| 2026 | $24,070.60 |
| 2025 | $23,369.51 |
| 2024 | $22,688.85 |
| 2023 | $22,028.01 |
| 2022 | $21,386.41 |
| 2021 | $20,763.51 |
| 2020 | $20,158.75 |
| 2019 | $19,571.60 |
| 2018 | $19,001.55 |
| 2017 | $18,448.11 |
| 2016 | $17,910.78 |
PFRS Overtime Limits
Tiers 5 and 6
The overtime limit is 15 percent of a member’s pensionable, non-overtime earnings (regular earnings, shift differential pay, location pay, longevity payments and top of pay grade bonus) from the previous calendar year.
If You Need Help
If you have questions about overtime limits or reporting overtime earnings, use our help desk form (select Monthly Employer Reporting from the dropdown).
Rev. 2/25