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This article applies to:

  • Product: Accounting CS Client Access
  • Subject: Payroll checks

Employer contributions setup examples

The examples in this article are common scenarios for employer contributions, and can be used for both live and after-the-fact payroll processing.
The examples assume that you have already set up a deduction item for the employee's contribution.

Example 1: Company match with a percentage limit

Makayla's company will match 100% of her contributions, up to 5% of her salary.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Add a new payroll item and enter a description.
  3. In the
    Type
     field, select
    Employer Contribution
  4. In the
    Calculation type
     field, select
    Percent of deduction
     and select the employee deduction item in the
    Deduction
     field.
  5. In the
    Default percentage
     field, select
    Single
     and enter
    100%
    .
  6. In the
    Limits
     section, select
    Per check
    ,
    % of Gross Pay
    , and
    5%
    .

Example 2: Company match with an amount limit

Carter works for a small business that just started a company match program. They’ll match up to 50% percent of his contribution with a $100.00 limit each weekly paycheck.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Add a new payroll item and enter a description.
  3. In the
    Type
     field, select
    Employer Contribution
    .
  4. In the
    Calculation type
     field, select
    Percent of deduction
    .
  5. In the
    Default percentage field
    , select
    Single
     and enter
    50%
    .
  6. In the
    Limits
     section, select
    Per check
    ,
    Amount
    , and
    $100.00
    .

Example 3: Company match with two-tier percentage limits (requires graduated table)

Harper’s company wants to encourage 401K saving; however, they need to break their match into a two-tier level to calculate the contribution based on:
  • 100% of the employee's 401(k) deduction, up to 3% of the current check gross pay amount.
  • and 50% of the employee's 401(k) deduction, up to 5% of the current check gross pay amount.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Add a new payroll item and enter a description.
  3. In the
    Type
     field, select
    Employer Contribution
    .
  4. In the
    Calculation type
     field, select
    Percent of deduction
    , then select the employee deduction item in the
    Deduction
     field.
  5. In the
    Default percentage
     field, select
    Graduated
     and select
    Table
    .
  6. Set up the graduated table as follows:
    • In the
      Calculation
       section, select
      Percent of deduction
       for
      Type
      , and
      401(k)
       for
      Deduction
    • In the
      Limit
       section, select
      Per check
       and
      % of Gross Pay
      .
    • In the 1st row of the table, enter
      100.0000
       in the
      Percent of deduction
       column and
      3.0000
       for
      To
       column.
    • In the 2nd row of the table, enter
      50.0000
       in the
      Percent of deduction
       column and
      5.0000
       in the
      To
       column.
In this example, let's assume that the employee's gross pay is $1000.00 and their 401(k) deduction is $100.
note
The maximum employer contribution amount that it can calculate is $50.00, because the maximum limit is 5%, and 5% of $1,000.00 gross pay is $50.00.
  1. 1st, Accounting CS takes 100% of the 401(k) deduction ($100.00) with a limit of up to 3% of gross pay (1000 x .03 = $30) and it calculates $30.00 for that portion, due to the limit.
  2. Next, it uses 50% of the remainder amount to calculate the second tier. So, $50.00 (maximum amount) - $30.00 (first tier amount) = $20.00 (remainder amount). 50% of $20.00 = $10.00.
  3. Accounting CS then calculates the employer contribution amount as $40.00. $30.00 from the first tier calculation + $10.00 from the second tier calculation = $40).

Example 4: Company match with 3 tiers

Sam's company wants to match their employees' 401K contributions as much as they can. They have a 3-tier matching level calculation based on:
  • 100% of the employee's 401(k) deduction, up to 2% of the current check gross pay amount.
  • and 50% of the employee's 401(k) deduction, up to 6% of the current check gross pay amount.
  • and 25% of the employee's 401(k) deduction, up to 10% of the current check gross pay amount.
  • The maximum deduction amount for employees is $70.
  1. Select
    Setup
    , then
    Payroll Items
    .
  2. Add a new payroll item and enter a description.
  3. In the
    Type
     field, select
    Employer Contribution
    .
  4. In the
    Calculation type
     field, select
    Percent of deduction
    , then the employee deduction item in the
    Deduction
     field.
  5. In the
    Default percentage
     field, select
    Graduated
    , then
    Table
    .
  6. Set up the graduated table as follows:
    • In the
      Calculation
       section, select
      Percent of deduction
       for
      Type
      , and
      401(k)
       for
      Deduction
    • In the
      Limit
       section, select
      Per check
       and
      % of Gross Pay
      .
    • In the 1st row of the table, enter
      100.0000
       in the
      Percent of deduction
       column,
      0.0000
       in the
      From
       column,
      2.0000
       in the
      To
       column, and
      plus
       in the last column.
    • In the 2nd row of the table, enter
      50.0000
       in the
      Percent of deduction
       column,
      2.0001
       in the
      From
       column,
      6.0000
       in the
      To
       column, and
      plus
       in the last column.
    • In the 3rd row of the table, enter
      25.0000
       in the
      Percent of deduction
       column,
      6.0001
       in the
      From
       column, and
      10.0000
       in the
      To
       column.
In this example, let's assume that the employee's gross pay is $1,000.00 and the employee takes a 401(k) deduction of the $70 maximum.
note
The maximum employer contribution amount that it can calculate is $100.00, because the maximum limit is 10%, and 10% of $1,000.00 gross pay is $100.00.
  1. First, Accounting CS takes 100% of the 401(k) deduction ($70) with a limit of up to 2% of gross pay (1000 x .02 = $20) and it calculates $20 for that portion.
  2. The next limit is $60 (1000 x .06 = $60), but we already matched $20, so $40 are left. The 2nd tier matches half of this, so the match is another $20.
  3. The final limit is $100 (1000 x .1 = $100), and with the already matched amounts, we're left with $40 maximum to match ($100 - $20 from the first tier - $40 from the 2nd tier = $40). However, this exceeds the employee deduction limit of $70, so the match amount is reduced to $30. 25% of the remaining $30 is $7.50.
  4. The employer match is $47.50 ($20 from 1st tier + $20 from 2nd tier + $7.50 from the 3rd tier).

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