A 401(k) is a type of retirement account an employee can use to set aside a portion of their wages for long-term savings.
There are two ways you can manage your company’s 401(k) with Gusto:
For a 401(k) that automatically integrates with your payroll, you can set up a new 401(k) with a number of 401(k) providers we partner with. Learn more here or check out available providers in the App directory under Financial benefits.
When you're ready to set up a new 401(k) plan that automatically integrates with Gusto, follow these steps:
Once you're all set up, eligible employees will be notified when it's time to enroll or opt out. Because your company's Gusto and 401(k) accounts are integrated, company and employee contributions are automatically included on payroll after the plan's start date. If you have questions about the first payroll that should deduct employees for 401(k) contributions, reach out to your 401(k) provider.
After the plan's start date, the new 401(k) benefit will be listed in the Benefits section of your Gusto admin account.
If deductions collected through Gusto reach the annual contribution limit, Gusto automatically stops deductions for that employee.
Refer to our Guideline, Betterment, Human Interest, or Vestwell help center articles for specific plan administration questions (including deduction troubleshooting, changing contributions, loan information, and more).
If you offer a 401(k) through a third party, you can set up payroll deductions in Gusto. Employee deductions and company contributions will be left in your company bank account to be moved externally.
Remember: If the company contributes to employee 401(k)s, those contributions are applied to the employee’s traditional 401(k) (and not their Roth 401(k)).
Set up deductions
Follow these steps to set up a new benefit deduction for your company. First you'll enter the amount and frequency, then you'll choose which employees you want to be deducted.
If you have employees who also contribute to another type of 401(k) (such as a Roth 401(k), repeat the steps above to set up employee deductions for the second type of benefit.
On the next regular payroll you run, deductions will show up on each enrolled employee's paystub as its own line item under "Employee Earnings."
If anyone changes their 401(k) contribution after you’ve set up deductions in Gusto, edit their deductions with the steps below.
If deductions collected through Gusto reach the annual contribution limit, Gusto automatically stops deductions. Keep in mind:
Change an employee’s deduction or company contribution
If an employee changes their contribution with your 401(k) provider, you’ll need to update their deductions in Gusto. If you’ve already run payroll for a pay period in which the contribution was already changed, update the contribution with the below steps and then request a benefit adjustment so we can amend their prior deductions.
The new deduction details will take effect on the next payroll you run.