A extremely compensated worker (HCE) is an worker who earns greater than a specific amount set by the Inner Income Service (IRS). The HCE threshold is adjusted annually for inflation. For 2023, the HCE threshold is $135,000. A extremely compensated worker 2025 is an worker who earns greater than $135,000 in 2025.
There are a variety of explanation why an employer would possibly need to determine extremely compensated workers. For instance, HCEs could also be topic to totally different guidelines and rules than different workers. They might even be eligible for various advantages and compensation packages. Moreover, employers could use HCE knowledge to make selections about pay fairness and variety.
