"Compensation," when referring to TCDRS payroll reporting, means an employee's gross pay, before federal income taxes or other deductions. This amount should include:
- Sick pay
- Vacation pay
- Value of non-monetary compensation (such as corporate housing)
- Retroactive pay based on an adjustment or judgment
- Regular supplemental pay (scheduled annual bonus or longevity pay)
- Annual or periodic salary supplements from federal, state or local sources (such as the state supplement to county judges)
- Any additional taxable income
Allowances, such as travel, car and uniform allowances, should only be included if the allowance amount is greater than the employee's actual expense.
Please do not include worker's compensation payments or damages awarded along with retroactive pay in your employee's compensation calculation.
For more information on what employee income is taxable, refer to IRS Publication 525: Taxable and Nontaxable Income.