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I <br />Genarally, the "highly compensated employee" and "key employee" <br />definitions are as follows. These abbreviated definitions may be <br />used for purposes of making estimates. However, precise <br />discrimination testing must be based on the definitions in the <br />law and regulations. <br />HIGHLY COMPENSATION EMPLOYEE <br />Any employee who, during the current or preceding year: <br />1. 5% owner* <br />2. earns more than $81,720 in compensation** <br />3. earns more than $54,480 in compensation** <br />and <br />is in "top paid" group (highest 20%) <br />4. an officer who earns more than $49,032 in compensation** <br />KEY EMPLOYEE <br />Any employee who, during the current or preceding 4 years: <br />1. is a 5% owner* <br />2. is a 1% owner* and earns over $150,00 in compensation <br />3. one of the top 10 owners* <br />and <br />4. an officer who earns more than $49,032 in compensation** <br />* Family attribution rules apply to all ownership situations. <br />** These are 1989 figures. They are indexed for inflation.