An employer-sponsored defined contribution retirement savings plan. Employees may contribute up to $23,000 pre-tax or as Roth after-tax in 2024. Employer contributions are deductible, and investment grows tax-deferred.
Why 401(k) Plan matters for employers
Employees can make pre-tax traditional 401(k) contributions, reducing their current taxable income, or Roth after-tax contributions that grow tax-free. The combined employee contribution limit for 2024 is $23,000, with a $7,500 catch-up allowed for employees 50 and older. Employer contributions are in addition to employee deferrals and are tax-deductible to the employer.
Plan administration involves payroll integration for deferral deductions, employer match calculations, and timely deposit of contributions to the plan custodian. The DOL requires that employee deferrals be deposited to the plan as soon as reasonably possible -- typically within 3-5 business days for small plans, or by the 15th of the following month at the absolute latest.
How BEG handles 401(k) Plan for clients
BEG Managed Payroll handles 401(k) Plan as part of a fully managed payroll service at $25-$45 per employee per month. Clients do not need to track compliance rules, filing deadlines, or calculation methods related to 401(k) Plan on their own. Everything is included. Learn about BEG Managed Payroll.
Frequently asked questions
Do employers have to manage 401(k) Plan themselves?
No. A managed payroll provider handles 401(k) Plan as part of full-service payroll. BEG manages this for clients at $25-$45 PEPM with no system migration required.
What happens if 401(k) Plan is handled incorrectly?
Errors related to 401(k) Plan can trigger IRS penalties, state agency assessments, or employee disputes. Catching and correcting errors before filing is far less costly than after-the-fact corrections.
How does BEG handle 401(k) Plan for managed payroll clients?
BEG tracks, calculates, and remits everything related to 401(k) Plan as part of fully managed payroll. Clients do not need to monitor compliance -- that is included in the service at $25-$45 PEPM.
Want payroll fully managed?
BEG handles everything at $25-$45 PEPM. See your exact price in 90 seconds.
About the author
Anthony Moretti is VP of Sales at Business Executive Group, where he builds BEG's managed payroll and HR service verticals for employers across Dallas-Fort Worth and nationwide. He writes the BEG Payroll Glossary to give employers plain-English answers on payroll and compliance.
Connect with Anthony on LinkedIn →