Highly Compensated Employee - AutomatedPensions.com
Highly Compensated Employee
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Updated: 8/Nov/06 15:36:56
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Highly Compensated Employee (HCE)

Satisfies one or more of the following definitions:

  • Someone who owns more than 5% of the company (a " 5 Percent Owner ") at any time during the current year or the preceding year.
  • Someone who made more than $100,000 during the preceding year ($100,000 is the Cola Indexed level used to test 2006 compensation for use in determining 2007 HCE status).

It is possible to limit the number of HCEs to the top-paid 20% of the work force. 5 Percent Owners must always be counted as HCEs.

The status of HCE vs. Non-Highly Compensated Employees (NHCEs) is used in Nondiscrimination Testing.


See also Comparison Of Key And Highly Compensated Employees

Non-Highly Compensated Employee
Key Employee
Ownership Attribution
Glossary