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Prorating RUIA
Contributions Among Multiple Employers
Unlike compensation under the Railroad Retirement Act and the Railroad
Retirement Tax Act, compensation and contributions under the Railroad
Unemployment Insurance Act (RUIA) may be prorated among the multiple employers.
If an employee of a national or system unit also worked for another covered
employer in the same month, the employee's combined earnings are creditable up
to the monthly RUIA maximum. If the combined earnings exceed the RUIA monthly
maximum, the creditable RUIA compensation may be prorated or allocated between
the two employers. The method of prorating is not set by the RRB but by an
agreement between the two employers. Any method which yields the correct RUIA
compensation is acceptable to the RRB.
If the RUIA compensation is prorated between a national or system unit and
another covered employer, the national or system unit must retain the records of
the employee's earnings from the other employer for the full payroll retention
period (5 years), provided by the employee. Information regarding employer
record retention is in Part V, Chapter 10.
Example of
Prorating RUIA Contributions with Primary Employer
One common method of apportioning RUIA compensation between two employers is
for the system unit to report RUIA compensation only in the amount not reported
by the primary employer. If the primary employer has reported RUIA compensation
in an amount less than the monthly maximum, subtract the compensation reported
by the primary employer from the monthly maximum. This remainder is the amount
of RUIA compensation to be reported by the system unit. However, do not exceed
the total earnings paid by the system unit for the month.
Example of
Prorating RUIA Contributions as a Percentage
Another method of apportioning RUIA compensation is for each employer to
report RUIA compensation in a ratio equal to the ratio of the gross earnings
paid by the two employers.
- Determine the total earnings for the month and the total creditable RUIA
compensation based on the total earnings.
- Determine the ratio of the system unit earnings to the total earnings.
- Multiply the creditable RUIA compensation by the system unit ratio. This
will yield the system unit share of RUIA compensation under this method.
These two methods of RUIA compensation prorating are illustrated in Appendix V.
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