"There is no bright line test, but the IRS has stated that the percentage of compensation includible for the HCEs cannot exceed the NHCE percentage by more than a 'de minimis' amount. What exactly does that mean? In practice, this has typically meant the difference between the two cannot exceed three percentage points (in favor of the HCEs). That said, it's important to look at the reasonableness of the exclusions and proceed conservatively when it comes to the compensation ratio test since there are no set standards on which to rely."  MORE >>