401K deductions with company match using QB Online Payroll

Your confusion ends here, @Sjones94.

Allow me to fill you in on everything you need to know about the retirement plan deductions and contributions in QuickBooks Online (QBO) Payroll.

The regular 401(k) and the Roth 401(k) are different retirement plans. Thus, the Roth 401(k) and 403(b) aren't available as company contributions through our service. This is because the entire contribution should be paid and reported separately through the provider and not through the same account as the employee after-tax deduction funds.

In addition, you can't deduct contributions to a Roth IRA as per the IRS guidelines. You can only make contributions to your Roth IRA after you reach age 70 ½.

I'm adding this article for more information: Retirement plan deductions/contributions.

You might also want to check out IRS guidelines for company contribution limits: IRS Retirement Topics - Contribution Limits.

Feel free to comment below if you need clarification about the retirement plans in QBO. I'm still open to your replies, @Sjones94.

Thank you! I was literally on chat for over two hours with screen sharing and they disconnected and left......however, I am wondering about this because we have always done it before. We have some employees who contribute to regular 401K and some to ROTH. Is this something not supported/allowed since we changed to QB Online Payroll - I've done it this way for years and suddenly I can't? 

We match both pre-tax and Roth 401(k) contributions; employees making Roth contributions have two "accounts" in their 401(k), separating the Roth contributions and our matching contributions--so the company is essentially making their contributions into a traditional IRA in parallel with the Roth the employee is funding.

We originally did this in Intuit Online Payroll, but here's how it transferred into QBOP with a recent merging of platforms. We have THREE deduction/contribution items: 401(k), Roth 401(k), and Safe Harbor Match. The first two are employee deductions with NO company contribution. The third is a company contribution with NO employee deduction. The employee's elective withholding percentage goes in the 401(k) deduction, and the company match percentage goes into the Safe Harbor Match. There's a bit of manual effort making sure the deduction and matching contributions are correct, but withholding percentages don't change often, so it's pretty much set it and forget it.

billy

Quick question as to why quickbooks online does not allow a 3% safe harbor for bonuses? 

Helen [last name removed]

[company name removed]

Company cannot match a Roth 401K. Roth is tax fee growth.

Roth 401ks can have a company match.

Hi Billy,  I am hoping you can help me with the set up for the Employer match on the Roth 401k.  I know you mentioned it is a bit of a manual effort.  I also believe there is new legislation in December 2022 regarding the Roth Match and QBO is in the engineering phase regarding the tax calculation.  However, I just need to get a company match set up for an employees Roth even if it is calculated as Safe Harbor for now.  I just am not finding a place to enter the company match except on the regular 401k employee deduction screen.  Can you help please???  thank you.  Linda

can you tell me where specifically & what screen to set up this Roth "employer match".  thank you. Linda

There really is no such thing as an "Employer Roth 401(k) Match".  Any matching contributions the employer makes MUST be made into a REGULAR 401(k) account.  Employers are not allowed to contribute to an employees Roth....only the employees contributions can go in there. When an employee retires and starts withdrawing from their accounts, the Roth 401(k) distributions are tax free....the amount contributed to the employees REGULAR 401(k) by the employer will be taxable income to the employee.

Hello QB Community. Does anyone know if this issue has been resolved? I find it mind boggling that a bookkeeping/payroll service who has technology to calculate matching contributions only built out the service for traditional and not ROTH deductions. 

I hear your concern about the lack of Roth deduction matching capabilities, @401kNerd. Let's work together to get you the most up-to-date information on this issue and explore any potential workarounds while we address this limitation in our system.

At the moment, the option to track the Company contribution for Roth deductions is still unavailable in QuickBooks Online Payroll.

In the meantime, I suggest looking for third-party payroll applications that provide this setup and help calculate matching contributions. You can simply go to the Apps menu, then select Find apps and search for a suitable application.

I also recommend sending feedback to our developers about this limitation. They can review your suggestions to improve the product and enhance your experience in QuickBooks. Here's how to send your request:

1. Go to Settings.
2. Click Feedback.
3. Enter your comments or product suggestions. Then, select Next to submit feedback.

Moreover, you can track feature requests through the QuickBooks Online Feature Requests website.

For your future reference, I've included some articles below about handling payroll reports and how taxes work in QuickBooks:

• How QuickBooks calculates payroll taxes
• Customize payroll and employee reports

I'm just around in the Community if you have further questions about adding a company match for Roth retirement plans. I'd be glad to help you some more.