STRS Annual Member Contribution - Service Credit

Service credit is a critical component of retirement reporting in Ohio, particularly for the STRS (State Teachers Retirement System) Annual Member Contribution process.

Factors affecting service credit calculation

The service credit calculation is based on four primary factors:

Number of Days Worked

The actual days the employee worked during the reporting period.

This value is retrieved from the STRS Days FTD field on the Payroll Information - State Required page.

This field represents the number of days the employee has worked during the specified pay period.

Employment Status

The system evaluates whether an employee is classified as full-time or part-time. This classification affects which calculation method is used to determine service credit.

For full-time employees, the service credit calculation includes special logic when the employee has worked fewer than 90 days during the reporting period.

Member Type

The employee's retirement system member classification.

This value is retrieved from the Member Type field on the Payroll Information - State Required page.

This field determines the employee's classification within the retirement system and influences:

Eligibility for service credit calculations
Which specific calculation rules apply
Reporting requirements for the STRS Annual Member Contribution

Pay Period Dates

The Pay Start Date and Pay End Date configured on the employee's pay rate (or primary pay rate) are critical factors in the service credit calculation.

These dates determine:

Which paychecks are included - Only paychecks that fall within the Pay Start Date and Pay End Date range are included in the service credit calculation.
Total compensation considered - The sum of all paycheck amounts within the date range, plus any accrued salary, is used in the calculation.
Service Credit Eligibility - If no paychecks exist within the specified date range, the service credit calculation may result in a value of zero.

To ensure accurate service credit calculations:

Verify that the Pay Start Date and Pay End Date are correctly set on each employee's pay rate.
Ensure the date range encompasses all relevant paychecks for the reporting period.
Review date ranges before running the STRS Annual Member Contribution Load process.

Special calculation rules - Full-time employees with less than 90 days worked

When a full-time employee has worked fewer than 90 days during the reporting period, the system uses a special calculation method to determine service credit.

The system calculates two values and selects the lesser of the two:

Calculation Method 1: Earnings-Based Service Credit

Service Credit = (Total Paycheck Amount + Accrued Salary) / 12000

Where:

Total Paycheck Amount = Sum of all paychecks within the Pay Start Date and Pay End Date range
Accrued Salary = Any accrued but unpaid salary for the period

Calculation Method 2: Days-Based Service Credit

Service Credit = The service credit value from the setup table for the days worked.

This value is retrieved from the OH STRS Annual Member Contribution - Service Credit page based on the number of days worked (STRS Days FTD).

Service credit calculation chart

The following table outlines the service credit calculation process.

Days Worked	Employment Status	Pay Checks in Range	Earnings-Based Calculation	Days-Based Calculation	Service Credit Assigned	Explanation
71	Full-time (< 90 days)	0 checks	$0 / 12000 = 0	0.39	0	No checks in pay period; earnings-based returns zero
71	Full-time (< 90 days)	16 checks ($21,454.80)	$21,454.80 / 12000 = 1.7879	0.39	0.39	Days-based is lower; 0.39 assigned
95	Full-time (≥ 90 days)	20 checks ($28,000)	$28,000 / 12000 = 2.33	0.52	0.52	Days-based is lower; 0.52 assigned
180	Full-time (≥ 90 days)	24 checks ($48,000)	$48,000 / 12000 = 4.00	1	1	Days-based is lower; 1.00 assigned
45	Part-time	10 checks ($8,500)	Different calculation	Different calculation	Varies	Part-time uses a different logic

Examples

Scenario 1: Short Pay Period with No Checks - Results in Zero Service Credit

Employee Details:

Employment Status: Full-time
Pay Start Date: 1/10/2025
Pay End Date: 8/25/2025
Days Worked (STRS Days FTD): 71 days
Paychecks in date range: 0
Accrued Salary: $0

Calculation:

Earnings-Based Calculation: ($0 + $0) / 12000 = 0
Days-Based Calculation: Service Credit from setup for 71 days = 0.39
Service Credit Assigned: Lesser of (0, 0.39) = 0

Result: Service Credit = 0

Even though the employee worked 71 days (which would typically earn 0.39 service credits), no paychecks fall within the specified pay date range. The earnings-based calculation returns zero, and since zero is less than 0.39, the service credit is assigned a value of zero.

Scenario 2: Extended Pay Period with Multiple Checks - Results in Days-Based Credit

Employee Details:

Employment Status: Full-time
Pay Start Date: 7/10/2024
Pay End Date: 8/25/2025
Days Worked (STRS Days FTD): 71 days
Paychecks in date range: 16 checks
Total paycheck amount: $21,454.80
Accrued Salary: $0

Calculation:

Earnings-Based Calculation: ($21,454.80 + $0) / 12000 = 1.7879
Days-Based Calculation: Service Credit from setup for 71 days = 0.39
Service Credit Assigned: Lesser of (1.7879, 0.39) = 0.39

Result: Service Credit = 0.39

The extended pay date range captures 16 paychecks totaling $21,454.80, which would calculate to 1.7879 service credits. However, since the employee only worked 71 days, the days-based calculation returns 0.39. The system assigns the lesser value of 0.39 as the service credit.