SERS Surcharge Report

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Last updated: Jul 31, 2024 by Andrea Boehm


The purpose of this program is to produce reports that will assist with the SERS surcharge calculations and GAAP reporting.

SERS places a surcharge on SERS employees whose salaries fall below a predetermined minimum annual compensation amount. This amount is stored within the USPS software and updated each year when notified by SERS. The amount is then used by this program to generate reports of individuals who are included on the monthly SERS reports and who fall below the minimum compensation unless they retired, are deceased, or are refunded during the year. The retirement and refunded status must be pending in the SERS office prior to June 30 of the fiscal year to be excluded from the reporting.

An initial list of those employees subject to the surcharge is sent by SERS to school districts in the early Fall. SERS requests that this list be verified, any exclusions noted, and returned later in the Fall. In order for the Surcharge program to handle any exclusions correctly, the "Surcharge Exempt" flag must be 'checked' (yes) on the employee's 400 payroll item record under CORE/PAYROLL ITEMS.

Surcharge amounts for rehired retirees are not included on the reports. The surcharge is only calculated on "regular" earnings, not on earnings earned as a rehired retiree. Service days for a rehired retiree will not include days after the rehired date.

The Earnings Amount is calculated by adding up the 400, 590 and 690 withheld amounts.  The total withheld is multiplied by the SERS Employee Rate, which is currently 10 (10% employee rate).

The Surcharge program compares the minimum annual compensation amount to the employee's calculated earnings which is the total SERS contributions divided by ten percent. If the calculated earnings are less than the minimum annual compensation amount and the "Surcharge Exempt" flag is not 'checked' (yes), the program then counts service days. An employee without SERS days or earnings will not appear on the reports.

Next, the total surcharge amount is calculated. If the employee has worked at least 120 days, then the surcharge is equal to 14% of the difference between the calculated earnings and the minimum compensation level. The minimum compensation amount is determined by SERS.  For FY2024, the surcharge amount is $30,000.   For current Surcharge amount, please go to https://www.ohsers.org/employers/annual-processes/surcharge/.  Districts can also contact SERS for the current rate or reference the SERS Employer Manual. The surcharge is calculated as follows:

If the employee works less than 120 days, the surcharge is prorated based on 180 days and the total surcharge for the employee becomes a percentage of the gross surcharge. For example, an employee works 50 days and has calculated earnings of $7000.

The surcharge is calculated as follows:

First calculate the gross surcharge as if the employee worked over 120 days.

($30,000.00 - earnings from report $7,000.00) X 14% = $3,220.00

Next, divide the number of days worked by 180 to obtain the proration.

50/180 = .278

Then multiply the proration by the gross surcharge:

$3,220.00 X .278 =$895.16 (surcharge amount)

The SERS Surcharge program generates a report that is similar in format to the one received from SERS. It lists the employee, earnings, days, and the calculated surcharge amount. 

Occasionally an employee will show up on the report sent by SERS with a lesser surcharge amount than what is calculated by the Surcharge program. SERS offers a discount on the surcharge amounts when an employee works in more than one school district. All employers involved will have a reduced surcharge for these shared employees. Since the software does not know which districts this employee has worked for, it is not possible for it to calculate the surcharge amount correctly. In this case, you will need to depend on the report from SERS.

Surcharge Payment Due Date

The SER Surcharge invoices are not created until all fiscal year end data has been received and compiled by SERS. Therefore, typically the invoice is available to districts during the month of August. Districts will receive a notice from SERS when the invoice is available.

SERS Days Calculation

How to calculate SERS Surcharge days:

  • Look at payments (pay date within fiscal year) for employee.
  • Go to Payrolls and find earliest payroll pay date. The begin date of earliest payroll is the start date.  Now go to the last payroll pay date for employee and the end date of the last payroll in the fiscal year is the stop date.  The start and stop date are what is used to calculate days is on the calendars and attendance. 
    • Note: If pay date is 7/2 and payroll begin and/or end dates are in June we will still include because of pay date in current fiscal year. 
    • Note: Even if employee is not paid for many months between payrolls this is still included.  Example:  Employee 1st pay date is 7/1/20 and last pay date is 4/2/21, we would include begin date from first payroll as 6/14/20 as start date and last payroll end date of 3/30/21 as stop date.
  • Go to employee payroll items and check if rehired employee and if there is a rehired date. If there is a hired date, then rehired date – 1 day is new stop date to count days.  Days from rehired date and after are not included.
  • Go to compensations for employee and look at all positions. Look at CALENDAR START/STOP dates to see if this position should be used.  Use the COMPENSATION CALENDAR as the calendar.  Do this for each compensation position.
  • Go to calendar(s) and find the number of work days, holidays and calamity days within the Start and Stop dates.  Do this for each calendar.  Do not count same day twice.
  • Go to Attendance and find the number of days within the Start and Stop dates, using the attendance activity date.
  • Go to Adjustments and find the number (amount field) of SERS Retirement Days within the FISCAL YEAR. Adjustments are the only place we count days within the entire fiscal year.

To Create a SERS Surcharge Report

Field Definitions

  • The option, allows the users to create and save certain reports  for different report runs for each report option.  The Default option is the original SSDT report and the Most Recent is the last report that was ran by the user.  If the report is no longer needed, click on to delete the report.  The Default reports cannot be deleted.  
  • Select the Fiscal Year you want the surcharge amounts reported for 
  • Select the  field. Checked indicates that fixed amount pay accounts are to be included in the proration of the surcharge across the pay accounts. Unchecked indicates the surcharge amount is to be prorated across percentage pay accounts only

  • The Report Selection Criteria Sort By option, offers the following choices which will be in effect for the report:
    • Employee Number
    • Employee Name
    • Full Account
    • Fund
    • Function
    • Object
    • SCC
    • Subject
    • Operational Unit
    • Instructional Level
    • Job

  • Check to  from the Sort Options selected

  • Select the Report Format from the drop down box:
    • PDF (download)
    • Comma Separated Values

  • Click on  to create report (Every time this report is generated, it will appear under Utilities/File Archive/Payroll Archive and look in 20XX-SERS Reporting tab)

Example SERS Surcharge Report

Example SERS Surcharge report Including Subtotal 


Warnings 

No SERS service days, surcharge cannot be calculated for employee number

  • If payments were all Accrued wages and were wages for the prior FY, use Core>Adjustments, 590 Payroll item using Amount Withheld to remove this amount
  • If payments are for current FY, if on a default calendar, add AT AT days (Transaction date has to fall within the Beginning and Ending dates of the payroll when the employee was paid) or add adjustments to SERS Retirement Days to remove the warning