Earned income calculation


Q. I recently received a letter from the Office of Personnel Management that I had gone over the 80 percent limit, and my FERS disability retirement was discontinued. OPM has quoted two different salary figures and different “earned income” in three letters that I received from them. Can you please help clarify as to how to calculate correct 80 percent limitation? Do you report net income under self-employment or gross? Does your earned income includes FERS retirement annuities?

A. The earnings test is based on all income from wages or self-employment actually received during a calendar year, plus deferred income that was earned during that calendar year.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.


  1. Would this include income from W-2G (Gambling Income) or other prize money? Since most of the time the losses exceed the winnings.

Leave A Reply