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Local Government Compensation Limits by Year

Local Government

Effective Date

Compensation Limit*

CPI-U Increase














































*Unless increased in accordance with Minnesota Statute 43A.17 Subd. 9(e)

Minnesota State Statute 43A.17 limits the salary and the value of all other forms of compensation of a person employed by a political subdivision of this state, excluding school districts starting in 2005. The statute establishes that the limits are adjusted on January 1 of each year based on the Consumer Price Index increase. The new limit is equal to the limit for the prior year and increased by the percentage increase in the Consumer Price Index for all-urban consumers (CPI-U) from October of the second prior year to October of the immediately prior year. The Bureau of Labor Statistics releases the monthly readings for the Consumer Price Index in the second half of the following month. The October readings are typically released after November 15th, therefore Minnesota Management and Budget will calculate and post the salary limit for the next calendar year in late November of each year. Refer to Subdivision 9 of State Statute 43A.17 for complete text.

The employee's salary includes deferred compensation and payroll allocations to purchase an individual annuity contract. The value of other forms of compensation is defined as the annual cost to the political subdivision for the provision of the compensation. Other forms of compensation which must be included to determine an employee's total compensation for the limit are all other direct and indirect items of compensation which are not specifically excluded by the subdivision. Other forms of compensation which must not be included in a determination of an employee's total compensation limit are: employee benefits that are also provided for the majority of all other full-time employees of the political subdivision, vacation and sick leave allowances, health and dental insurance, disability insurance, term life insurance, and pension benefits or like benefits the cost of which is borne by the employee or which is not subject to tax as income under the Internal Revenue Code of 1986; dues paid to organizations that are of a civic, professional, educational, or governmental nature; and reimbursement for actual expenses incurred by the employee which the governing body determines to be directly related to the performance of job responsibilities, including any relocation expenses paid during the initial year of employment.

Compensation Limit Increase Process

The total value of compensation may not exceed the limits as shown in the chart above without a compensation limit increase from the Commissioner of MMB. The Commissioner may increase the limit for a position if the commissioner determines the position requires special expertise and needs a higher salary to attract and retain a qualified candidate. The Commissioner shall also consider the salary rates paid to other persons with similar responsibilities in the decision to increase the limit. The Commissioner may not increase the limit until it is presented to the Legislative Coordinating Commission and after receipt of the Commission's recommendation. Local governments wishing to apply for a compensation limit increase for a position may do so by filling out the Compensation Limit Increase Request Form (word version) (pdf version). The questionnaire may be sent to the Commissioner of Minnesota Management & Budget. If a local government receives a compensation limit increase for a position, the limit is increased annually by the amount of the CPI-U increase in the chart.


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