4.06: Gross earnings for defined contribution (DC) plans

Employer and employee defined contribution (DC) and Personal Healthcare Fund contributions are calculated based on gross earnings and are reported on a Detail 4 – DC Contribution (DTL4) record.

Gross earnings include all compensation reported on a participant's W-2 or 1099R form as earnings for services performed for the employer, including many compensation types that are not reportable on a DTL2 record, such as bonus payments, severance pay, cash in lieu of an excluded benefit, and group term life insurance premiums if that amount exceeds $50,000 annually.

Gross earnings may include more than the amount listed in Box 1 (Taxable Wages) of the employee's W-2 form. Gross earnings also include items exempt from taxable wages, such as employee amounts contributed to a tax-sheltered annuity (excluded from Box 1 of W-2) and employee costs to an employer-sponsored healthcare plan (excluded from Box 1 of W-2).

Compensation types that are not part of gross earnings and not reportable on a DTL4 record:

• Short-term disability.
• Weekly workers' compensation (when paid by a third party).
• Long-term disability.
• Reimbursements of any kind.

Example of reporting gross earnings:

• $7,000 Taxable income reported on Box 1 of W-2
• +$300 Pretax employee contribution to a tax-sheltered annuity
• $7,300 Gross earnings (amount to be reported in the Employer Reported Wages field on the DTL4 record)

IRS limitations

Every year, the IRS announces the latest contribution limits for retirement savings accounts. Review the IRS limits for more information based on the employee's age and plan type. Once a member reaches those limits, ORS cannot post excess contributions.

Last updated: 05/20/2025