Your employer may contribute to your 401(k) through a match, profit sharing, or both. This article explains how each works, how contributions are calculated, and what your 401(k) still offers if your employer does not contribute.
A 401(k) employer match is money your company contributes to your 401(k) account based on how much you contribute. It's one of the most valuable retirement benefits your employer can offer.
To get the full match, contribute at least up to the percentage your employer matches. You can confirm whether your employer offers a match in your Gusto Retirement dashboard. Choose the path that matches how you signed in.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View, then select Manage 401(k).
Once signed in, follow these steps:
Go to Settings in the main menu.
Select your 401(k) account.
Within the Contributions section, you will see any applicable match for your account.
Visit the Gusto Retirement sign-in page and sign in with your Gusto Retirement credentials, or use Gusto Single Sign-On (SSO).
Once signed in, follow these steps:
Go to Settings in the main menu.
Select your 401(k) account.
Within the Contributions section, you will see any applicable match for your account.
Employers may offer a partial match, a full match, or a combination of both.
Partial match
With a partial match, your employer matches a fraction of your contributions, up to a certain percentage of your salary.
For example, if you earn $50,000 and contribute 4% ($2,000), and your employer matches 50% of each dollar up to 4%, they add $1,000 to your account. If you contribute only 2% ($1,000), your employer adds $500 — and you miss out on the remaining $500 in potential employer contributions.
Full match
A full match — also known as a dollar-for-dollar match — means your employer matches 100% of your contributions, up to a set percentage.
For example, if your employer offers a 100% match on up to 4% of your $50,000 salary, contributing 4% means you put in $2,000 and your employer adds another $2,000, doubling your contributions.
Some employers offer a combination of both. For instance, your company may provide a 100% match up to 3%, then 50% up to 6%.
Lowering your contribution below the match threshold means you will not get the full amount available to you.
Profit sharing (or a non-elective contribution) is another way your employer may contribute to your 401(k) account. Unlike a match, profit-sharing contributions are made at your employer's discretion — typically after the end of the plan year — and you can get them even if you do not personally contribute to the plan.
The term “profit sharing” can be misleading. Employers can contribute any amount, regardless of whether the company turned a profit or incurred a loss.
Profit-sharing contributions are made as traditional, pre-tax contributions. Depending on the plan formula your employer selects, they will contribute either a percentage of your compensation or a flat dollar amount.
You can check whether your employer offers profit sharing in your Gusto Retirement dashboard under your 401(k) Settings page.
Employer match and profit-sharing contributions may be subject to a vesting schedule — a timeline that determines how much of those contributions you own based on how long you've worked for your employer.
Even if your employer contributes to your account, you may not be entitled to keep the full amount until you've met the vesting requirements. If you leave your job before you're fully vested, you may forfeit some or all of the unvested employer contributions. Your own contributions are always 100% yours.
Learn more about how vesting works.
You can still benefit from your 401(k), even without employer contributions. Benefits include:
Reducing your current income taxes through pre-tax contributions
Tax-free growth on contributions until distribution
The ability to transfer funds to another employer plan if you change jobs
Automatic payroll deductions that make it easier to save consistently
A potential Saver's Credit on income taxes for qualified participants
This information is general in nature and is for informational purposes only. It should not be construed as investment advice. Investing involves risk and investments may lose value. Consult a qualified financial adviser.