Set up and manage a 401(k) with Guideline

Gusto partners with Guideline to offer a fully integrated 401(k) solution. Contributions automatically sync with payroll, and both employers and employees have access to 401(k) dashboards within Gusto. Learn more about pricing and plan options on Guideline's website.

Requirements to offer a 401(k) to your team vary by state—contact Guideline to learn more about setting up a compliant plan.

If you already offer a 401(k) through another provider, you can manually set up payroll deductions to collect employee contributions. You can also transfer an existing plan Guideline with the steps below.

What's a 401(k)?

A 401(k) is an employer-sponsored retirement plan that lets eligible employees save and invest part of their paycheck. Contributions are deducted from an employee's gross pay and put into a 401(k) account.

The maximum contribution an employee under 50 can make is $22,500 in 2023 ($20,500 in 2022). If the employee is over 50 they may make an additional catch-up contribution of $7,500 in 2023 ($6,500 in 2022).

Roth 401(k)

A Roth 401(k) is a post-tax employer-sponsored retirement plan that lets eligible employees save and invest part of their paycheck. Contributions are deducted from an employee's check after federal and state taxes are calculated. If the deduction is based on a percentage, we use gross pay to calculate the amount that will be deducted from the employee's net pay.

In some plans, the employer may also contribute by matching up to a certain percent of the employee's contribution. The maximum contribution an employee under 50 can make is $22,500 in 2023, and ($20,500 in 2022). If the employee is over 50, they may make an additional catch-up contribution of $7,500 in 2023 ($6,500 in 2022).

More 401(k) terms to know

Custodian: The financial institution holding the 401(k) funds.
Plan participant: An employee enrolled in the 401(k) plan.
Plan sponsor: The designated administrator in charge of the employer’s 401(k) plan.

Set up a 401(k) for your team

When you're ready to set up a new 401(k) plan, follow the steps below to set up a new plan that automatically integrates with payroll.

You must have Full Access admin permissions in Gusto to set up the integration.

Sign in to your Gusto admin account.
Click the Benefits tab.
Under 401(k), click Add.
Choose No - we want to offer new benefits, then click Next.
On the "Start a New 401(k)" page, you can learn more about getting a plan with our 401(k) partner Guideline. If you'd rather use a different provider, check out our other 401(k) integrations in the App directory under "Financial benefits."
Click Set up 401(k) at the bottom of the page to begin setting up a new plan.
You'll be taken to Guideline's website to finish setting up your new plan and connecting it to Gusto.

The new 401(k) benefit will be listed in the Benefits section of your Gusto admin account after the plan's start date, and then you can view enrollment and contribution data.

Running payroll after the plan's start date

If you have questions about when to run the first payroll that should deduct employees for 401(k) contributions, reach out to Guideline to confirm.

Once the plan’s start date has passed, running payroll in Gusto will automatically deduct employees for their contributions and record the company contributions. The day after the check date, Guideline debits the company for the employee deductions and company contributions. Guideline invests the funds in employees’ 401(k)s the next day.

FAQs

Q: Does Guideline support CalSavers, OregonSaves, etc.?

Guideline can provide plans in these states that satisfy the state requirements. There are several advantages to a Guideline plan over the state plan (support for Safe Harbor, higher contribution limits, lower participant fees, etc.) Contact Guideline to learn more.

Q: Can I set up flat dollar amount contributions?

Guideline allows flat dollar amount contributions only for plans without a company match. Reach out to Guideline to activate dollar amount contributions.

Transfer your company's existing 401(k) to Guideline

When you are ready to transfer your 401(k) plan to Guideline, follow the steps below. If you'd like to transfer your 401(k) plan to another provider, reach out to that provider directly for next steps.

Sign in to your Gusto admin account.
Click the Benefits tab.
Click +Add under 401(k). If your 401(k) is already set up, click Retirement and Savings and select the type of 401(k) (Traditional or Roth) from the dropdown menu.
Choose Yes - we currently offer this benefit, then click Next.
Click Manage 401(k) with Gusto to begin the process of transferring your existing 401(k) to Gusto.
Input the requested information.
Click Get Started at the bottom of the page.
Guideline will reach out to you within one business day to confirm whether your plan qualifies to be transferred and start the process.

View your company's enrollment and contributions

If you've set up an integration between Gusto and your 401(k) provider, you can see your plan's high-level details of your plan in Gusto after the plan's start date. If you have questions about your plan or need to make any changes, please reach out to your provider directly or visit their help center.

Sign in to your Gusto admin account.
Click the Benefits tab.
Under Active Benefits, click 401(k).
Click the tabs at the top of the page for information about your 401(k) plan.
- Overview: plan info and current account balance.
- Employees: enrollment details.
- Contribution History: year-to-date and per payroll history.

You can also view Guideline deductions and contributions from the Reports section of your admin account, under Payroll journals.

Plan administration: New hires, troubleshoot deductions, change contributions, etc.

Troubleshoot missing payroll deductions

There are a few reasons why there may not be payroll deductions:

Your plan may not have started yet—check your Guideline account to confirm the start date.
The employee may not yet be eligible for the benefit per your plan's eligibility settings.
Your company may have run payroll before the enrollment or deduction change was processed.
Taxes are applied before deductions. The employee may have had $0 in net pay after taxes.
Reimbursements are not eligible for 401(k) deductions.
The employee may have reached the IRS annual contribution limit. Once they do, the 401(k) is no longer listed in the employee's Gusto account—refer to your Guideline account or the year-to-date tax summary to confirm.

New hires

Gusto automatically sends eligible new hires' info to Guideline. Once the employee is eligible, Guideline emails them with instructions to log in and opt in or out of the benefit.

If contributions haven't started yet for a new hire, they may not yet be eligible to enroll per your company's plan settings. This could also be because the new hire enrolled after your payroll admin already ran payroll for the pay period.

Dismissals

The dismissal date automatically syncs to Guideline. After their last day of eligibility, Guideline will send the employee their options to roll over their 401k to another provider or maintain it with Guideline.

Change contributions or policy settings

Reach out to Guideline to change any of your company's policy settings.

Changing deductions or the company match for a specific payroll: this is not supported per 401(k) plan policies. Guideline plan documents require that employee deductions and the company match cannot be blocked on any payroll, including off-cycle payrolls.

Over contributions

If your company over-contributes to plans, the surplus is most commonly applied to the plan's "Surplus Cash" account in Guideline. This is to mitigate the risk of having to pay taxes on the over contributions and will be used towards the next payroll's contributions.

Loans

If your plan allows participants to request loans, employees can reach out to Guideline to apply. Once the employee reaches the repayment stage of the loan, Guideline will notify them with instructions. If Guideline collects the repayment through payroll deductions, the employee can expect to see post-tax loan deductions on their paystubs. Refer to the terms of your loan or contact Guideline to confirm your repayment method.

Form 5500

Guideline files Form 5500 on your company's behalf.