Use this article to understand if you're eligible for owner contributions and how to request them through your Gusto retirement dashboard.
Owner contributions allow business owners who earn self-employment income (income not paid through W-2 payroll) to make 401(k) contributions directly. If you're paid via W-2, your 401(k) contributions come through payroll instead.
Your eligibility depends on your business entity type and how you're compensated. In general, owners who earn self-employment income can make owner contributions.
Owners of the following entity types typically earn self-employment income and can make owner contributions:
Limited partnerships
Partnerships
LLCs taxed as partnerships
Single-member LLCs
Sole proprietorships
If your business is one of these entity types, all 401(k) contributions — including owner contributions — need to come through payroll:
LLCs taxed as S-corporations
LLCs taxed as C-corporations
Any type of corporation
Owners of corporations and LLCs taxed as corporations receive W-2 wages just like other employees.
Important: S-corporation owners often receive both W-2 wages and self-employment income. However, the Internal Revenue Service (IRS) does not consider self-employment income from an S-corporation as compensation for 401(k) purposes. Only the W-2 wages count.
You can set up a recurring contribution that draws on a regular schedule, or a one-time contribution for a specific tax year. Expand the section that matches what you want to do.
To schedule a recurring owner contribution, follow these steps.
Sign in to your Gusto Retirement dashboard and go to your contributions using one of these options. Learn more about SSO.
Sign in to Gusto and go to Benefits > Active Benefits > 401(k) > Manage.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Sign in directly at the Gusto Retirement sign-in page.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Open the Gusto Retirement mobile app and sign in.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
In the Recurring section, choose your contribution frequency (pay period, weekly, biweekly, semi-monthly, monthly, or quarterly).
Enter your traditional and/or Roth contribution amounts.
Choose the start date (will appear after entering the amounts).
Review your details for accuracy, then click Save.
To schedule a one-time owner contribution, follow these steps.
Sign in to your Gusto Retirement dashboard and go to your contributions using one of these options. Learn more about SSO.
Sign in to Gusto and go to Benefits > Active Benefits > 401(k) > Manage.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Sign in directly at the Gusto Retirement sign-in page.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Open the Gusto Retirement mobile app and sign in.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
In the One-time section, click Schedule a new contribution.
Enter the tax year, withdrawal date, and your traditional and/or Roth amounts.
Review your details for accuracy, then click Save.
You can manage a scheduled contribution from your retirement dashboard. Use the option that matches what you want to do:
To cancel: Go back to the Contributions page in your retirement dashboard and set the contribution dollar amount to $0. You can also reach out to Gusto Retirement at least two business days before the scheduled draw to request a cancellation (unless the contribution is for the prior plan year).
To reschedule: Go back to the Contributions page and adjust the date you want the funds to pull.
Keep these dates in mind when you set up your contributions:
You need to submit your contribution request in your Gusto Retirement dashboard by December 31 of the applicable plan year to establish your intent.
If you want to defer the actual contribution until after your taxes are finalized and self-employment income is determined, you may select a withdrawal date in the following year — no later than March 15.
If your compensation is insufficient to support the contribution, we will issue a refund.
Owner contribution funds are pulled from the company's default bank account on file with Gusto Retirement. Once you set up owner contributions, we recommend letting your finance team know so they're aware of the upcoming withdrawal.
Early in the following year, we'll send you a task notification to confirm the self-employment income on your tax filing (your compensation for purposes of the plan). We use that amount to calculate nondiscrimination test results and any employer contributions.
If you do not see the owner contribution options on your participant dashboard, it may mean one of the following:
You are not listed as earning self-employment income in your Gusto Retirement account
Your entity type does not allow for owner contributions (like S-corporations)
Reach out to your plan sponsor if you believe you should be able to make owner contributions. An administrator cannot initiate an owner contribution request on your behalf.
The above information is intended to provide general information about Gusto Retirement plan provisions, it is not intended to be tax or legal advice. As always, if you have specific questions about your situation, you should consult your tax advisor.