Add your SIMPLE IRA to payroll

The savings incentive match plan (SIMPLE IRA) is a tax-deferred retirement savings plan for employees. Learn more about SIMPLE IRA benefits and requirements on our blog.

Maximum contributions: the 2022 max is $14,000. If your plan allows catch-up contributions, employees age 50 or older can make additional contributions up to $3,000 for a total of $17,000. 

Add SIMPLE IRA payroll deductions to Gusto

Gusto doesn't offer a SIMPLE IRA, but if your company manages one through a third party, payroll admins can add the benefit to Gusto. This lets you collect employee contributions through payroll deductions, and we'll calculate company and employee taxes. Deducted funds remain in the company bank account for you to transfer to your SIMPLE IRA provider. 

Before you start: make sure you have a list of all employees enrolled in this benefit, their personal contributions per pay period, and your company contribution. If you have any questions about your plan setup, review your plan document or contact your SIMPLE IRA administrator.

  1. Sign in to your Gusto admin account.
  2. Go to the Benefits section.
  3. Under “Financial Health,” choose SIMPLE IRA.
  4. Indicate whether you currently offer a SIMPLE IRA.
    • If you don’t offer a SIMPLE IRA yet, you’ll need to set one up through another provider before adding it to Gusto (Gusto doesn’t offer a SIMPLE IRA).
  5. Add a name for the benefit. This will appear on employee paystubs.
  6. Indicate the company contribution per employee. We keep track of this for your records and year-end taxes. The IRS allows you to contribute in one of two ways:
    • 1-3% matching contribution: Match employee contributions dollar-for-dollar, up to 3% of their compensation (as defined by the IRS). You can match less than 3% (1% as the lowest), but only for 2 out of 5 years of offering a SIMPLE IRA.
    • 2% non-elective contribution: Contribute 2% of each eligible employee's compensation, regardless of whether or how much the employee contributes.
  7. Your answer to the next part depends on whether your company's plan has automatic enrollment (check with your provider if you're unsure): 
    • If yes, indicate whether automatically enrolled employees are deducted a percentage of their pay or a set dollar amount.
    • If no, choose My plan does not have automatic enrollment
  8. Indicate whether your plan uses the standard deduction limit or the special catch-up limit.
    • If most employees are under 50, choose Use the standard limit. If your plan policy does allow the catch-up limit for employees over 50, you can change each of those employees' limits in step 13. 
  9. Click Save & continue.
  10. Select each person enrolled in your company's SIMPLE IRA. If needed, you can later customize their individual contributions or deduction limits in step 13.
  11. Click Save.
  12. If employees contribute different amounts to their SIMPLE IRAs, or you need to change the annual deduction limit for employees over 50, here's how to customize individual deductions: 
    • Click View benefit. You'll be taken to the new SIMPLE IRA benefit you just set up. 
    • Find the name of the employee whose deduction or limit you need to change and click Edit benefit.
    • Make your update.
    • Click Save.

The next time you run payroll, company and employee contributions will be listed on employee paystubs. You can return to the Benefits section of your admin account anytime to add, remove, or change employee deductions or the plan details.

Employee deductions remain in your company bank account. Work with your SIMPLE IRA provider to transfer deductions and company contributions to your employees' SIMPLE IRA accounts. 

For questions about your SIMPLE IRA policy and benefits, contact your SIMPLE IRA provider directly.