### Question
Can you define what highly compensated individual means?


### Answer
**Highly compensated individual** is defined as the following in *26 U.S.C. § 105*:

> an individual who is—


(A) one of the 5 highest paid officers,


(B) a shareholder who owns (with the application of section 318) more than 10 percent in value of the stock of the employer, or


(C) among the highest paid 25 percent of all employees (other than employees described in paragraph (3)(B) who are not participants)

#### Citation:
  - *26 U.S.C. § 105*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME**

