This article is for payroll admins who want to add a 529 savings plan to Gusto.
We do not offer 529 benefits. But if your company manages one through a third party and wants to contribute to employee accounts, you can add it to Gusto. This lets you apply employee deductions and employer contributions on payroll, then we’ll calculate company and employee taxes. Funds stay in your company bank account for you to transfer to your 529 provider.
If your company does not contribute to employee 529 accounts, you do not need to add 529 deductions to Gusto. You can instead have employees fund their 529 accounts directly with their chosen provider.
You can add 529 deductions to Gusto by setting up a custom benefit.
Note: You’ll record employee and company contributions in Gusto as a dollar amount per pay period. If your provider sets up contributions as percentages, check your 529 provider’s records to find the dollar amount per pay period.
To add 529 payroll deductions to Gusto:
Go to Benefits.
Under the Custom Benefits section, click Show more custom benefits.
Next to Custom Benefit, click Set up.
Add a name for the benefit. This will appear on employee paystubs.
Under Employee deduction per pay period, enter an amount. This is how much we’ll deduct from your employees’ wages each pay period.
If employees contribute different amounts, you can customize each person’s deductions and company contributions in step 11.
Enter the Company contribution per pay period. We’ll keep track of this for your records and for year-end tax purposes. If your provider sets up your company contribution as a percentage, check your 529 provider’s records to add it as a dollar amount per pay period.
Click Save & continue.
Select which employees you want to enroll in this benefit.
Click Save.
If your employees each contribute different amounts or get different company contributions, you can now edit each employee’s individual amounts:
Click View benefit to view the deductions you set up.
Find the employee whose deduction or company contribution you need to change and click Edit benefit.
Update their deduction, company contribution, or both.
Click Save.
On the next regular payroll you run, the deduction will appear on each enrolled employee’s paystub under “Employee Earnings” as its own line item.
529 contributions are post-tax, but earnings are tax-free. We treat any employer match as imputed pay, which is taxable as income. We automatically record company contributions on employee tax forms.
To add an employee, change deductions or contributions, or remove the benefit, check out our guide to benefit deductions.