401k Safe harbor match

Sharing this information will help you properly set up the payroll item for the 401k safe harbor match setting up a plan in QuickBooks Desktop Payroll, jennrobe.

Currently, QuickBooks Desktop doesn't have a built-in calculation for the 401K Safe Harbor Plan company match. As a workaround, you can set up two payroll items and manually configure the amount based on the employee and employer percentages. 

For example:

• For a 100% contribution: If an employee contributes 1%, then the employer contribution is also 1%.
• For a 50% contribution: If an employee contributes 3%, then the employer contribution is 1.5%.

To create a new payroll item for the company’s contributions:

1. Go to the Lists menu, then select Payroll Item List.
2. Click on Payroll Item at the bottom left and choose New.
3. Choose Custom Setup, then click Next.
4. Select Company Contribution, then click Next.
5. Enter the name of the item and the tax agency.
6. Select 401(k) Co. Match as the tax tracking type, then hit Next.
7. Set Neither as the calculation option, then enter the equivalent rate and limit for the one percent of their contribution.
8. Follow the on-screen instructions and click Finish when done.
9. Repeat the same steps for the 50 percent employer match.

To help manage your other company deductions and employee’ retirement/health insurance plan, check out these articles:

• Set up or change a retirement plan
• Set up and manage payroll items for your insurance benefit plan
• Set up and manage company contributions

Moreover, you can run payroll reports in QuickBooks to monitor payroll totals, including details of your employees’ deductions and contributions.

Always remember that our doors are always open for the assistance you need with employee contribution. Our team is ready to provide guidance and assistance whenever you need it. Please feel free to reply to this message, and we will be happy to help you further.