How to add solo 401k employee, employer and after tax contribution on payroll?

You've come to the right place for assistance, @ding2. You can set up 401(k) contributions through the Employees section in the Payroll menu. I'll guide you through the process.

You can add those three types of contributions, however, you'll need to create two different items for this. Here's how to set it up:

1. Click on Payroll in the left menu. Then, select Employees.

2. Choose an employee from the list.

3. Click on Edit in the Deductions & Contributions section.

4. Click + Add deduction/contribution.

5. Select Retirement Plans for the Deduction/contribution type and 401(k) for the Type.

6. Enter other necessary details, including the Employee deduction and Company contribution.

7. Click Save.

8. Repeat steps 4 to 7, but choose After-tax Roth 401(k) for the Type. Then, enter the necessary details and click Save again.

To learn more about setting up retirement plan, feel free to read this article: Set up or change a retirement plan.

Additionally, run payroll reports in QBO to have the necessary details about your employees' deductions and contributions, which will streamline your tax filing.

Once done, you might want to Explore QuickBooks Payroll to help optimizing your payroll processes within the program. Our specialists are available to provide valuable insights and techniques for managing payroll-related activities effectively in the program.

Please don't hesitate to circle back in this thread whenever you need additional guidance setting up 401(k) contributions in QBO. I'll be happy to assist you further.

Thanks for quick response. 

To clarify - there are 3 types of contributions we are working with 

Category 1 - Employee Contribution - can be pre tax of ROTH (after tax)

Category 2 - Employer Contribution - can be pre tax or ROTH (after tax)

Category 3 - In addition to above 2, third kind of contribution is "After Tax" but it is not ROTH. It's just called After Tax contribution which can be converted to ROTH as a separate task but that conversion will happen after payroll.

The question is specific to this third category of After Tax contribution through payroll. Is there a Standard category for this type? Or can we create a Custom category and add it to the Payroll along with first 2 category? 

Thank you for the additional information you provided, ding2. I'll share some details when adding payroll contributions.

For the third category you want to set up, we currently do not have a dedicated tax tracking type available. Additionally, there is no option to create a custom contribution category.

As a workaround, you can select from the types listed under Health insurance or Retirement Plans, as these contributions have after-tax options.

Also, it's best to consult your accountant to provide professional advice to determine the most effective way to add your payroll contributions using QuickBooks.

Moreover, you can visit this article to monitor your contributions or deductions by generating reports within the program: Run payroll reports in QuickBooks.

Every contribution counts, and we ensure to guide you as far as we can. You can reply to this thread if you require further help regarding payroll contributions through QuickBooks.

We had followed the instructions provided in this Thread to set up Payroll for Mega Backdoor ROTH through QuickBooks. But after running a few payrolls, it’s stopping the contributions at 23,500 for 2025
We wanted to add the 69500 for mega back door. How do we change the contribution limit to $69,500 instead of stopping at $23,000? We have the payroll core version in QB.

Hi there, @ding2.

The After-tax Roth 401(k) with an annual limit of $23,500 is fixed for IRS compliance. While the annual maximum of $23,500 can't be changed, you can explore a third-party integration to QBO that has this feature.

Browse our QuickBooks Online App Store with many third-party integrations that allows you to enter higher annual limits: QuickBooks App Store.

Make sure to contact the third-party administrator (TPA) of your 401(k) plan. They will guide you on how to properly implement Mega Backdoor Roth and ensure compliance with IRS.

For more details about setting up a retirement plan, please check this article: Set up or change a retirement plan.

After that, consider creating a 401(k) loan repayment payroll item and add it to the employee profile in your QBO Payroll account.

If you have additional questions, feel free to leave a reply below.

"The After-tax Roth 401(k) with an annual limit of $23,500 " - this is the part I am not able to understand. The After-Tax Roth 401(k) limit is up to $70,000 (or $77,500 for 50 years or older)

Total 401(k) Contribution Limit: This limit applies to the combined contributions from all sources (employee, employer match, and after-tax contributions). For 2025, the total limit is $70,000, increasing to $77,500 for those age 50 and older. 

Shouldn't After-Tax Roth 401(k) be allowed to go until the total reaches $70K? $23K limit is for employee contribution towards 401K. In our case, we both are 50 plus years of age.

The 401(k) after-tax Roth Employee Contributions limit for individuals aged 50 and above is $31,000 in QuickBooks Online, ding2.

In alignment with IRS compliance regarding contribution limits, QuickBooks follows the limit of $23,500 for those under 50 years of age and $31,000 for those aged 50 and above.

The after-tax contribution for the Mega Roth Backdoor 401(k) plan enables you to save beyond the $31,000 limit set for after-tax Roth 401(k) contributions. However, please note that QuickBooks Online does not currently support this feature due to compliance with IRS contribution limits.

For potential workarounds, I recommend contacting your accountant to ensure that your W-2 and other end-of-year reports are accurate.

You can refer to the Learn about employee contribution limits section of this article for more information about employee contribution limits: Set up or change a retirement plan.

To obtain the essential information regarding your employees' deductions and contributions, you can generate a payroll reports in QuickBooks Online. For more information, please check this article: Run payroll reports.

Feel free to circle back to this thread so we can guide you once you have more questions about 401(k) after-tax Roth.

I appreciate your prompt replies.

I understand that QB currently does not currently support this feature. But I don't see how you are talking about this being in compliance with IRS limits for After-Tax contributions which is much higher limit than what QB is allowing. 

As a minimum, I feel like you should work on providing provide some work arounds within QB Payroll so we can implement these IRS supported Mega Backdoor Strategy. I believe there are at least some people who are using this strategy with QB Payroll, but I can't seem to find any right answers. You say contact CPA and CPA is saying to contact QB Support. We are just not sure where to go.