Employer contributions setup examples

Example 1: Company match with a percentage limit

Select
Setup
, then
Payroll Items
.
Add a new payroll item and enter a description.
In the
Type
field, select
Employer Contribution
In the
Calculation type
field, select
Percent of deduction
and select the employee deduction item in the
Deduction
field.
In the
Default percentage
field, select
Single
and enter
100%
.
In the
Limits
section, select
Per check
,
% of Gross Pay
, and
5%
.

Example 2: Company match with an amount limit

Select
Setup
, then
Payroll Items
.
Add a new payroll item and enter a description.
In the
Type
field, select
Employer Contribution
.
In the
Calculation type
field, select
Percent of deduction
.
In the
Default percentage field
, select
Single
and enter
50%
.
In the
Limits
section, select
Per check
,
Amount
, and
$100.00
.

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

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.

Select
Setup
, then
Payroll Items
.
Add a new payroll item and enter a description.
In the
Type
field, select
Employer Contribution
.
In the
Calculation type
field, select
Percent of deduction
, then select the employee deduction item in the
Deduction
field.
In the
Default percentage
field, select
Graduated
and select
Table
.
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.

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.
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.
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

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.

Select
Setup
, then
Payroll Items
.
Add a new payroll item and enter a description.
In the
Type
field, select
Employer Contribution
.
In the
Calculation type
field, select
Percent of deduction
, then the employee deduction item in the
Deduction
field.
In the
Default percentage
field, select
Graduated
, then
Table
.
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.

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.
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.
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.
The employer match is $47.50 ($20 from 1st tier + $20 from 2nd tier + $7.50 from the 3rd tier).