When you offer a Gusto 401(k) plan, employee contributions are processed through payroll. This article explains how contributions are taken from paychecks, how funds are collected and allocated, and what to expect if you're a self-employed owner or have a self-service plan.
When you offer a Gusto 401(k) plan and use Gusto or a Gusto Embedded provider (HiBob or HR for Health) for payroll, we process all employee contributions directly through payroll.
Contributions are taken directly out of all enrolled employees' paychecks based on the deferral elections in each employee's dashboard.
One business day after your pay date, Gusto 401(k) pulls an Automated Clearing House (ACH) debit from your company's bank account for the total amount of:
Employee contributions
Matching or non-elective contributions (if applicable) included in your plan
This amount is based on the deferral elections in each employee's dashboard and the employer contribution formula in your plan's documents. These funds are then allocated to employees' 401(k) accounts within 5 – 7 business days of the ACH debit.
Owners who get self-employed income have their employee and employer contributions handled differently. Learn more about how self-employed income contributions are processed.
If you have a self-service plan, you need to upload your payroll reports within your dashboard for contribution processing. Learn more about how self-service plans can upload payroll reports.