For members of Tiers 5 and 6, the 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).
Tracking and Reporting Overtime Earnings
Automatic Capping Feature of Enhanced Reporting
A key feature of enhanced reporting is its ability to automatically track year-to-date totals for overtime earnings and notify you when a Tier 5 or 6 member reaches their overtime limit.
The automatic capping feature will take effect depending on:
- Whether you report ERS or PFRS members; and
- When you began submitting reports using enhanced.
If You Report ERS Members
The ERS overtime limit is a set dollar amount for each calendar year. Therefore, once you report using enhanced, the automatic capping feature will take effect at the start of the next calendar year.
- If you submitted your December 2025 report using enhanced, the automatic capping feature is in effect for calendar year 2026 and Retirement Online will automatically notify you when one of your Tier 5 or 6 employees reaches the ERS overtime limit. See what you need to do when automatic capping is in effect. (Note: Based on when your organization switched to enhanced reporting, the automatic capping feature may have already been in effect as of a previous calendar year.)
- If you begin submitting reports using enhanced during 2026, the automatic capping feature will be in effect for calendar year 2027. See what you need to do while automatic capping is not in effect.
If You Report PFRS Members
The PFRS overtime limit is 15 percent of a member’s pensionable, non-overtime earnings from the previous calendar year. With enhanced reporting, the system automatically calculates the member’s limit based on the earnings you reported. Therefore, you must report using enhanced for a full calendar year for the automatic capping feature to take effect.
- If you submitted your December 2024 report using enhanced, the earnings reported during 2025 were used to calculate your members’ limits for 2026. Therefore, the automatic capping feature is in effect for calendar year 2026 and Retirement Online will automatically notify you when one of your Tier 5 or 6 employees reaches the PFRS overtime limit. See what you need to do when automatic capping is in effect. (Note: Based on when your organization switched to enhanced reporting, the automatic capping feature may have already been in effect as of a previous calendar year.)
- If you submitted your December 2025 report using enhanced, the earnings reported during 2026 will be used to calculate your members’ limits for 2027. Therefore, the automatic capping feature will be in effect for calendar year 2027. See what you need to do while automatic capping is not in effect.
- If you begin submitting reports using enhanced during 2026, the earnings reported during 2027 will be used to calculate your members’ limits for 2028. Therefore, the automatic capping feature will be in effect for calendar year 2028. See what you need to do while automatic capping is not in effect.
What You Need to Do When Automatic Capping IS in Effect
- Report overtime earnings using the appropriate earnings code.
- Once you receive a warning message stating a Tier 5 or 6 member reached their overtime limit:
- Refund member contributions if your Report Summary has “Excess Withholdings.” Go to the Improper Withholdings page for a breakdown of the amount owed to the 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 (the same as you had been using)—do not use the Non-Pensionable Overtime (NOT) earnings code.
What You Need to Do While Automatic Capping is NOT in Effect
- For ERS Members Only: Reset year-to-date totals for overtime earnings to $0.00 in your payroll system at the beginning of each calendar year.
- 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 |
|---|---|
| 2026 | $21,589.00 |
| 2025 | $20,958.00 |
| 2024 | $20,459.00 |
| 2023 | $19,729.00 |
| 2022 | $18,233.00 |
| 2021 | $17,301.00 |
| 2020 | $17,067.00 |
| 2019 | $16,779.00 |
| 2018 | $16,406.00 |
| Fiscal Year | Overtime Limit |
|---|---|
| April 1, 2017 – December 31, 2017* | $12,036.00 |
| April 1, 2016 – March 31, 2017 | $15,721.00 |
| April 1, 2015 – March 31, 2016 | $15,608.00 |
| April 1, 2014 – March 31, 2015 | $15,490.00 |
| April 1, 2013 – March 31, 2014 | $15,261.00 |
| April 1, 2012 – March 31, 2013 | $15,000.00 |
| *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).
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