The Surcharge is an additional employer charge based on the salaries of lower-paid SERS members. It is exclusively used to fund health care.
The Surcharge is calculated at 14% of the difference between an employee’s annual compensation amount and the minimum compensation amount, which is determined annually by the System’s actuaries. This is available on the Audit Resources page.
The Surcharge is limited to 2% of each district’s total qualified SERS payroll, not the total of the initial individual Surcharge. The statewide limit is 1.5% of total qualified payroll for all employers.
Example: For FY2026, if the minimum compensation level is $33,000, and the employee earns $7,000, the surcharge is $3,640.
| Item | Amount |
|---|---|
| Minimum annual compensation amount | $33,000 |
| Covered compensation | $7,000 |
| Difference | $26,000 |
| Initial Individual Surcharge | $26,000 x 14% = $3,640 |
If the member is paid for less than 120 days during the year, the Surcharge is pro-rated. The fraction used is the number of days paid over 180 days. This is the same fraction used in determining contributing service credit.
Example: The Surcharge for the above employee who works only 110 days is $2,224.04.
| Item | Amount |
|---|---|
| Initial individual surcharge | $3,640 |
| Pro-rated fraction | 110 days / 180 days = 0.611 |
| Pro-rated Surcharge | 0.611 x $3,640 = $2,224.04 |
The Surcharge applies to SERS members reported during the fiscal year who earned below the minimum compensation, except:
The employer will receive an eSERS message board message advising that the Surcharge Report is available for review. During the Surcharge process, review your Surcharge Report. If you identify any members who meet the last two qualifications, please email Employer Services at employerservices@ohsers.org to have them exempted.
The Surcharge Report is available on eSERS in August of each year.
Payment of the Surcharge amount is due within 30 days from notification that the final Surcharge amount has been calculated. This must be completed in the Payment Remittance application on eSERS.
If your district is participating in the Foundation Program and chose to have the Surcharge collected from its Foundation payments, SERS automatically deducts the Surcharge payment from your September Foundation payment.
Please refer to your Foundation Deduction Notice in eSERS if you are unsure whether SERS is collecting your Surcharge through the Foundation Program.
If you have questions about your employer responsibilities or need assistance with eSERS, contact Employer Services at 1-877-213-0861.
