Rail Employer Reporting Instructions

Part IV - Particular Types of Compensation Payments 

Chapter 1: Regular Earnings

1

Regular Earnings Definition

Regular earnings are payments made for services rendered as an employee. This includes payments 

to part-time and seasonal employees, as well as regular earnings paid to employees who are not 

working due to illness, injury, or pregnancy. Any payment made through the regular payroll system 

is presumed to be regular earnings. Regular earnings are creditable as Tier I, Tier II, and RUIA 

compensation and generate a service month credit for the month service was performed.

Non-Monetary Earnings

Earnings may be paid as a commodity, a service, or a privilege. If an employee is to be paid in any 

form other than money, the employee and employer must agree upon the arrangement and the 

value of the commodity, service, or privilege being provided. Non-monetary earnings will result 

in creditable compensation. Non-monetary earnings are creditable in the amount of ascertainable 

or agreed upon value.

The language in the Railroad Retirement Act (RRA) and the Railroad Retirement Tax Act (RRTA) 

differ with respect to non-monetary earnings. Under the RRTA, the value of non- monetary 

earnings is taxable whether or not there is an agreement as to the value or that the earnings will 

not be paid in cash.

Reporting Compensation on a Paid or Earned Basis

Regular earnings may be reported as compensation for the period the payment was earned, referred 

to as "earned basis," or when the payment was made, referred to as "paid basis."

• Earned Basis: Compensation is credited with respect to the payroll period in which it was 

earned even though paid and reported at a later date.

• Paid Basis: Compensation is credited with respect to the period in which compensation is 

paid, actually or constructively, regardless of when the services which generated the 

compensation were performed.

Employee Requests Compensation to be Reported When Earned

Employers choosing to report compensation on a paid basis are subject to the proviso that an 

employee, within four years after the report, may request to have the compensation reported, by 

way of an adjustment, for the year in which it was earned. This provision is found in the Railroad 

Retirement Board's regulations 20 CFR 209.15 (a). Employee requests to have compensation 

adjusted to an earned basis may be made to the employer directly or to the RRB who will notify 

the employer to file an adjustment report. Requests made under this proviso must be honored.
Rail Employer Reporting Instructions

Part IV - Particular Types of Compensation Payments 

Chapter 1: Regular Earnings

2

Service Months

Service is always reported when the service was actually or constructively performed. There are 

no options for reporting service. Because service is always reported when the service was 

performed, service can never correctly be reported for months after the employee retired, resigned, 

died or relinquished employment rights. Compensation may be paid and credited to former 

employees but since former employees no longer perform a service, no service months are

creditable.

Adverse Effect of Erroneous Service Months

Reporting a service month when no service month is creditable can adversely affect both the 

employee and the employer. The employee may be denied benefits for the month of reported 

service or may have received benefits in excess of the correct amount based on the erroneous 

service month. The employer's Railroad Unemployment Insurance Act contribution may be 

adversely effected in two ways. The employer may be erroneously determined to be the last 

employer on record and be charged for benefits paid. The employee may be paid more than the 

correct amount of unemployment benefits, which will then be charged to the employer when 

determining the employer's contribution rate.