Calculating Contributions

For help determining how contributions are determined, below are two examples.

In the following examples, Maria and Nancy each work at the same job in the same hospital. Each earns $25 hourly. Maria works full time — 37.5 hours a week, 52 weeks of the year. Nancy works part time — 18.75 hours a week, 52 weeks of the year. They both get paid every two weeks during 2008. Here's how their contributions are calculated for a two-week pay period in 2008.

1. Calculate the annualized earnings (AE): hourly rate × full time hours in a year

Maria: $25 × (37.5 hours × 52 weeks) = $25 × 1,950 = $48,750
Nancy: $25 × (37.5 hours × 52 weeks) = $25 × 1,950 = $48,750

2. Calculate earnings per pay; hourly rate × (total hours worked in a pay period)

Maria: $25 × (37.5 hours × weeks in a pay period) = $25 × (37.5 × 2) = $25 × 75 = $1,875
Nancy: $25 × (18.75 hours × weeks in a pay period) = $25 × (18.75 × 2) = $25 × 37.5 = $937.50

3. Calculate contributions at low rate: [(.069 × year's maximum pensionable earnings*) × earnings per pay] ÷ AE

*If annualized earnings are less than the YMPE, use annualized earnings. The 2008 YMPE of $44,900 is used in these examples.

Maria: [(.069 × $44,900) × $1,875] ÷ $48,750 = [$3,098.10 × $1,875 ] ÷ $48,750 = $119.16
Nancy: [(.069 × $44,900) × $937.50] ÷ $48,750 = [$3,098.10 × $937.50] ÷ $48,750 = $59.58

4. Calculate contributions at high rate** [[.092 × (AE – YMPE)] × earnings per pay] ÷ AE

** If annualized earnings are less than the YMPE, contributions at the high rate will be $0.

Maria: [[.092 × ($48,750 – $44,900) × $1,875]] ÷ $48,750 = [(.092 × $3,580) × $1,875] ÷ $48,750 = [$354.20 × $1,875] ÷ $48,750 = $13.62
Nancy: [[.092 × ($48,750 – $44,900) × $937.50]] ÷ $48,750 = [(.092 × $3,580) × $937.50] ÷ $48,750 = [$354.20 × $937.50] ÷ $48,750 = $6.81

5. Add high and low contributions to get total contributions deducted for pay period

Maria: $119.16 + $13.62 = $132.78
Nancy: $59.58 + $6.81 = $66.39