cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Experienced Member

401(k) limits per Employee

We offer both PreTax and Roth 401(k) plans. I have an employee contributing 4% to PreTax and 3% to Roth. As it is now, I have each 401(k) set up as separate line items with the yearly limit for each. But this employee always goes over the limit at the end of the year when adding these two together. I need to know if Quickbooks Enterprise will allow me to set the yearly limit for the individual employee adding these two items together, or if this is something I will have to just track (hard with over 230 employees) and figure manually?

Solved
Best answer 02-22-2019

Accepted Solutions
Established Community Backer ***

Re: 401(k) limits per Employee

@Ashly1 

 

"I guess the issue is now getting the correct calculations,"

 

Let's review this math:

4% + 3 % = the person wants to contribute 7%, split between the two investment types.

 

4/7 = 57% 401(k)

3/7 = 43% Roth 401(k)

 

They have the combined Limit for $19,000 + $6,000 makeup for being over 50, if that applies.

 

401(k):

 

57% of $19,000 = $10,857.14

+ 57% of the makeup $6,000 = $3,428.57

= $14,285.71 401(k) Payroll Item Employee Deduction Limit

 

Roth 401(k):

43% of $19,000 = $8,142.86

+ 43% of the makeup $6,000 = $2,571.43

= $10,714.29 Roth 401(k) Payroll Item Employee Deduction Limit

 

$14,285.71

+

$10,714.29

=

$25,000.00 combined

 

Skip the Makeup amount, if that doesn't apply.

5 Comments
Established Community Backer *

Re: 401(k) limits per Employee

As long as both your 401(k) payroll deductions are set up with the federal annual limits (including catch-up contributions for 50+ employees), you should be able to set the annual limits in the employee template.  Withholdings should stop once the employee limit is met.

Moderator

Re: 401(k) limits per Employee

Hello, @Ashly1.

 

Allow me to help share some information about setting an annual limit for combined payroll items in QuickBooks.

 

At this time, we can only set an annual threshold for each benefit plan contribution. Since we can't set an annual limit for these items together, we can only use your workaround for now.

 

We appreciate if you can send us feedback. This way we'll be aware of the things that we need to add and develop in the future update. 

 

Here's how: 

 

  1. On your QuickBooks account, select the Help menu.
  2. Go to Send Feedback Online.
  3. Click Product Suggestion.

Our product development team visits this section regularly to ensure we're delivering on what our customers need. Also, if you need further assistance with the payroll in the future, you can visit our payroll support web-page: https://payroll.intuit.com/support/contact/?infosrc=qs&service=16.

 

Please let me know if you have additional questions about the 401(K) limits. I'll be here to help however I can.

Established Community Backer ***

Re: 401(k) limits per Employee

@Ashly1 

 

You need to "do the math" for this: "As it is now, I have each 401(k) set up as separate line items with the yearly limit for each. But this employee always goes over the limit at the end of the year when adding these two together."

 

You don't set the limit or rate in Edit Payroll Item, because each employee name has their own rate and limit. Otherwise, QB stops when it hits the Lower of the two potentially conflicting settings.

 

For the employee participating in Both Plans, split the limits individually per that employee's participation, not the plan document.

 

If that is 4% pre-tax and 3% Roth, ignore the individual account Type limits, when you know the person won't exceed the individual limit by account type, and set their limit for each Type of "bucket" they will contribute into. They are putting aside 7% of pay, and backcompute that from the Combined Limit allowed for that year, this person's age, etc. Backcompute and set it per account type for that person, for their payroll items.

Experienced Member

Re: 401(k) limits per Employee

Thank you for your response. I guess the issue is now getting the correct calculations, or just watching the accounts towards the end of the year.

Thanks again.

Established Community Backer ***

Re: 401(k) limits per Employee

@Ashly1 

 

"I guess the issue is now getting the correct calculations,"

 

Let's review this math:

4% + 3 % = the person wants to contribute 7%, split between the two investment types.

 

4/7 = 57% 401(k)

3/7 = 43% Roth 401(k)

 

They have the combined Limit for $19,000 + $6,000 makeup for being over 50, if that applies.

 

401(k):

 

57% of $19,000 = $10,857.14

+ 57% of the makeup $6,000 = $3,428.57

= $14,285.71 401(k) Payroll Item Employee Deduction Limit

 

Roth 401(k):

43% of $19,000 = $8,142.86

+ 43% of the makeup $6,000 = $2,571.43

= $10,714.29 Roth 401(k) Payroll Item Employee Deduction Limit

 

$14,285.71

+

$10,714.29

=

$25,000.00 combined

 

Skip the Makeup amount, if that doesn't apply.