[SOLVED] How does my employer figure the 401k match?
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[SOLVED] How does my employer figure the 401k match?
My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
I SOLVED THE MYSTERY!
Thank you everyone for helping me narrow down what I was missing. Some of you were right I think. I completely missed this. They put 1/2 of the match in cash and 1/2 of the match in company stock. I don’t know where the cash is in the account, but I was looking through the contributions. On 3/6 and 3/10 of this year their are 2 contributions. The totals are $1480.72 & $1480.71 These 2 together equal $2961.43 which is exactly 4% of my total gross earnings of $74,035.86
Maybe the cash just goes into the Vanguard S&P 500 fund that I have chosen for my investment here. I’m not certain. I’m now also more confused by reading the 401k rules that say tips aren’t figured into the 401k match, but I guess they must be
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
I SOLVED THE MYSTERY!
Thank you everyone for helping me narrow down what I was missing. Some of you were right I think. I completely missed this. They put 1/2 of the match in cash and 1/2 of the match in company stock. I don’t know where the cash is in the account, but I was looking through the contributions. On 3/6 and 3/10 of this year their are 2 contributions. The totals are $1480.72 & $1480.71 These 2 together equal $2961.43 which is exactly 4% of my total gross earnings of $74,035.86
Maybe the cash just goes into the Vanguard S&P 500 fund that I have chosen for my investment here. I’m not certain. I’m now also more confused by reading the 401k rules that say tips aren’t figured into the 401k match, but I guess they must be
Last edited by passive101 on Tue Mar 28, 2023 3:26 am, edited 4 times in total.
Re: How does my employer figure the 401k match?
Did you make those contributions evenly over every paycheck or did you contribute on only some paychecks? Your match is not clear but typically the match is only applied on paychecks where you contribute a minimum amount? Some employers will do a yearly 'true-up" once a year to account for uneven contributions but this is at employer discretion.
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Re: How does my employer figure the 401k match?
Yup, they only put money in from last year in a lump some the following year. I did talk to the 401k company once before and they said it didn’t matter when you contributed. I was worried that I might go over the max (but I fell short of that because business was slower some months).Beachey wrote: ↑Sun Mar 26, 2023 12:20 am Did you make those contributions evenly over every paycheck or did you contribute on only some paychecks? Your match is not clear but typically the match is only applied on paychecks where you contribute a minimum amount? Some employers will do a yearly 'true-up" once a year to account for uneven contributions but this is at employer discretion.
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Re: How does my employer figure the 401k match?
Have you read the match language in your 401k plan document? Matching contribution % may not apply to income from tips and commissions.
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Re: How does my employer figure the 401k match?
It doesn’t distinguish between anything about tips and commission that I can find.HomeStretch wrote: ↑Sun Mar 26, 2023 2:35 am Have you read the match language in your 401k plan document? Matching contribution % may not apply to income from tips and commissions.
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Re: How does my employer figure the 401k match?
"Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
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Re: How does my employer figure the 401k match?
Yup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
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Re: How does my employer figure the 401k match?
You'll need to take a look at the plan documents to find out exactly what the 4% is of/up to. If you have access to manage your 401(k) online, chances are good that the documents are available through that same website.
Did you start in the middle of the year? It's not immediately clear from the numbers you posted, but it's possible there is some proration going on.
Did you start in the middle of the year? It's not immediately clear from the numbers you posted, but it's possible there is some proration going on.
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Re: How does my employer figure the 401k match?
Nope. I've worked there full time for over 3 years.DeliberateDonkey wrote: ↑Sun Mar 26, 2023 11:35 pm You'll need to take a look at the plan documents to find out what the 4% is of exactly. If you have access to manage your 401(k) online, chances are good that the documents are available through that same website.
Did you start in the middle of the year? It's not immediately clear from the numbers you posted, but it's possible there is some proration going on.
Re: How does my employer figure the 401k match?
The lump sum thing is called a "true up contribution". That's typically where they catch up on the non-recurring items that may not have been accounted for along the way. That should have hit by now and you need to dig into it.
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Re: How does my employer figure the 401k match?
You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
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Re: How does my employer figure the 401k match?
The only way I can see what they put in for the match is looking at the 401k website.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:52 pm You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
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Re: How does my employer figure the 401k match?
You keep shooting down every suggestion your are given. It's your money. Figure it out.passive101 wrote: ↑Sun Mar 26, 2023 11:53 pmThe only way I can see what they put in for the match is looking at the 401k website.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:52 pm You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
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Re: How does my employer figure the 401k match?
I'm just saying that it never shows on a paycheck what they contribute, but I can see it on the 401k website. Maybe I can try talking to corporate or something about it. Our management doesn't know anything about these issues and when their are problems can take a long time to figure it out. The company I work for is owned by another company.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:55 pmYou keep shooting down every suggestion your are given. It's your money. Figure it out.passive101 wrote: ↑Sun Mar 26, 2023 11:53 pmThe only way I can see what they put in for the match is looking at the 401k website.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:52 pm You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
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Re: How does my employer figure the 401k match
Did you ever contribute less than 4%?
Should be very easy to reconcile the transactions on the 401k website.
Did you review your 2021 statements for comparison?
Should be very easy to reconcile the transactions on the 401k website.
Did you review your 2021 statements for comparison?
Re: How does my employer figure the 401k match?
Seems strange your paycheck doesn't have all the itemizations.
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Re: How does my employer figure the 401k match
I made sure to always contribute more then the 4% and set it to automatically contribute every paycheck.tesuzuki2002 wrote: ↑Mon Mar 27, 2023 12:42 am Did you ever contribute less than 4%?
Should be very easy to reconcile the transactions on the 401k website.
Did you review your 2021 statements for comparison?
Maybe I'll have to try talking to them about it. I don't think they would try to rip me off because they seem like good people.
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Re: How does my employer figure the 401k match?
Yeah. There are sometimes I I've noticed that they don't show my PTO or overtime break down, but the gross amount that I'm paid seems to be correct. I think sometimes they just forget to list everything on there.
Maybe I can ask them if they can give me a copy with everything broken down? Sometimes there are things like a $20 incentive bonus and stuff for doing extra things or staying to work extra to help out in a different department but earning a little less per hour.
Re: How does my employer figure the 401k match?
It sounds like there's only 1 lump match so this wouldn't work. (if you're talking about OP's own contributions being below 4%, then you have a typo in your original suggestion which is probably the confusion)Hyperchicken wrote: ↑Sun Mar 26, 2023 11:55 pmYou keep shooting down every suggestion your are given. It's your money. Figure it out.passive101 wrote: ↑Sun Mar 26, 2023 11:53 pmThe only way I can see what they put in for the match is looking at the 401k website.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:52 pm You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
OP, has the 4% match always been correct in previous years? Were you paid in different categories before too? But there's no subset of those categories that add up to 36k, so it doesn't seem like that's the problem.
btw your categories add up to about 72k instead of 74k. Also 1445 is exactly 2% of the 72k - I don't know if that's just a coincidence or a clue.
Re: How does my employer figure the 401k match?
I've been doing this for years. I front-load my 401K such that I've maxed out my annual contributions by the end of the first quarter. And that means that I max out my contributions before my employer maxes out its matching. I then get a true up the following June which makes me whole. I guess you can say it's at the employer discretion but it's codified in our plan documents. It's not like they decide every year whether to do a true-up or not. Of course they can always change the plan.Beachey wrote: ↑Sun Mar 26, 2023 12:20 am Did you make those contributions evenly over every paycheck or did you contribute on only some paychecks? Your match is not clear but typically the match is only applied on paychecks where you contribute a minimum amount? Some employers will do a yearly 'true-up" once a year to account for uneven contributions but this is at employer discretion.
I did have a previous employer that did true-ups but their plan required that you still be employed to receive the true-up. Annoying. Not the case with my current employer. Good thing because I'm retiring shortly and the only reason I'll keep my 401K open at all is to get that last true up next year.
Anyway, the reason I front load (and live on tiny paychecks for a few months) is that my industry is well known for frequent layoffs and they typically happen in the second half of the year.
Cheers
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Re: How does my employer figure the 401k match?
OP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pmYup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
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Re: How does my employer figure the 401k match?
PghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 amOP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pmYup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
On my W2 I have
12a AA- $16,390.97
12b DD - $4,962.36
12c and 12d are blank
Is the match supposed to be 4% of what I contributed or what I earned for the year?
Re: How does my employer figure the 401k match?
I've never seen employer contributions on my paycheck. I have to go online and see itemized transactions there.
Are you sure you're not getting employer contributions along the way and this is just the true up contribution? You'll need to go look at itemized transactions last year in your 401k.
Are you sure you're not getting employer contributions along the way and this is just the true up contribution? You'll need to go look at itemized transactions last year in your 401k.
Re: How does my employer figure the 401k match?
W2 box 12 code AA for Roth contributions.
Code DD and the amount of your employer-sponsored health coverage plan.
I would check with the payroll department about the calculation.
Aldo ask if they will credit the match after you retire (assuming that the 401k is left in place.
Code DD and the amount of your employer-sponsored health coverage plan.
I would check with the payroll department about the calculation.
Aldo ask if they will credit the match after you retire (assuming that the 401k is left in place.
"I started with nothing and I still have most of it left."
Re: How does my employer figure the 401k match?
Excellent point! Same here - have to log into my 401K account to actually see those.MrJedi wrote: ↑Mon Mar 27, 2023 6:56 am I've never seen employer contributions on my paycheck. I have to go online and see itemized transactions there.
Are you sure you're not getting employer contributions along the way and this is just the true up contribution? You'll need to go look at itemized transactions last year in your 401k.
Cheers.
Re: How does my employer figure the 401k match?
I read it as: lesser of 4% of eligible compensation or 100% of your contributionspassive101 wrote: ↑Mon Mar 27, 2023 6:47 amPghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 amOP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pmYup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
On my W2 I have
12a AA- $16,390.97
12b DD - $4,962.36
12c and 12d are blank
Is the match supposed to be 4% of what I contributed or what I earned for the year?
It’s not clear to me if you’re comparing apples to apples: match for 2022 made in 2023, to 2022!income?
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Re: How does my employer figure the 401k match?
I'm only looking at my paychecks and W2 from 2022 and the match from 2022runner540 wrote: ↑Mon Mar 27, 2023 7:37 amI read it as: lesser of 4% of eligible compensation or 100% of your contributionspassive101 wrote: ↑Mon Mar 27, 2023 6:47 amPghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 amOP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pmYup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
On my W2 I have
12a AA- $16,390.97
12b DD - $4,962.36
12c and 12d are blank
Is the match supposed to be 4% of what I contributed or what I earned for the year?
It’s not clear to me if you’re comparing apples to apples: match for 2022 made in 2023, to 2022!income?
Re: How does my employer figure the 401k match?
How are you looking up 2022 match?passive101 wrote: ↑Mon Mar 27, 2023 7:58 amI'm only looking at my paychecks and W2 from 2022 and the match from 2022runner540 wrote: ↑Mon Mar 27, 2023 7:37 amI read it as: lesser of 4% of eligible compensation or 100% of your contributionspassive101 wrote: ↑Mon Mar 27, 2023 6:47 amPghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 amOP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pm
Yup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
On my W2 I have
12a AA- $16,390.97
12b DD - $4,962.36
12c and 12d are blank
Is the match supposed to be 4% of what I contributed or what I earned for the year?
It’s not clear to me if you’re comparing apples to apples: match for 2022 made in 2023, to 2022!income?
Have you looked at all itemized transactions from 2022 in your 401k? Often there are matching contributions all along the way and true up is just an extra one to catch up if you front loaded some of your contributions and didn't maintain the full year.
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Re: How does my employer figure the 401k match?
They only put it in 1x a year. Nothing else gets contributed for us.MrJedi wrote: ↑Mon Mar 27, 2023 8:23 amHow are you looking up 2022 match?passive101 wrote: ↑Mon Mar 27, 2023 7:58 amI'm only looking at my paychecks and W2 from 2022 and the match from 2022runner540 wrote: ↑Mon Mar 27, 2023 7:37 amI read it as: lesser of 4% of eligible compensation or 100% of your contributionspassive101 wrote: ↑Mon Mar 27, 2023 6:47 amPghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 am
OP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.
What worked for me to verify the match # probably won’t work for you, based on your other posts. (What I would do is add up my salary and bonus and apply the match % and it usually worked out to a very similar number as the match amount)
What you could do is take a look at your W-2 for 2022. If you have a line item in box 12 marked with a “D” that is the total amount you’ve deferred into the 401k for the year (according to your employer).
If that amount x 4% doesn’t equal the match amount, call your payroll department. The 401k people don’t really have enough insight into why your employer does what they do.
Best of luck and let us know if you get a resolution!
On my W2 I have
12a AA- $16,390.97
12b DD - $4,962.36
12c and 12d are blank
Is the match supposed to be 4% of what I contributed or what I earned for the year?
It’s not clear to me if you’re comparing apples to apples: match for 2022 made in 2023, to 2022!income?
Have you looked at all itemized transactions from 2022 in your 401k? Often there are matching contributions all along the way and true up is just an extra one to catch up if you front loaded some of your contributions and didn't maintain the full year.
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Re: How does my employer figure the 401k match?
@MrJedi -
Not being argumentative, but OP said their company deposits matching funds once per year in the following calendar year. This isn’t that unusual and I’m wondering if the discrepancy has to do with how the deferrals from each paycheck were set up. There was nothing mentioned about a catch-up payment.
OP - I would call your payroll department to get clarity. As others have said, code AA denotes a Roth contribution to your 401k and the amount listed should have generated a much bigger match for you.
Not being argumentative, but OP said their company deposits matching funds once per year in the following calendar year. This isn’t that unusual and I’m wondering if the discrepancy has to do with how the deferrals from each paycheck were set up. There was nothing mentioned about a catch-up payment.
OP - I would call your payroll department to get clarity. As others have said, code AA denotes a Roth contribution to your 401k and the amount listed should have generated a much bigger match for you.
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Re: How does my employer figure the 401k match?
Is the 401k match usually based on the annual pay or how much I contribute to the 401k?PghPharmBoy wrote: ↑Mon Mar 27, 2023 8:42 am @MrJedi -
Not being argumentative, but OP said their company deposits matching funds once per year in the following calendar year. This isn’t that unusual and I’m wondering if the discrepancy has to do with how the deferrals from each paycheck were set up. There was nothing mentioned about a catch-up payment.
OP - I would call your payroll department to get clarity. As others have said, code AA denotes a Roth contribution to your 401k and the amount listed should have generated a much bigger match for you.
Re: How does my employer figure the 401k match?
If depends on the plan... Some are based on gross earnings, others based on contributions.passive101 wrote: ↑Mon Mar 27, 2023 8:48 amIs the 401k match usually based on the annual pay or how much I contribute to the 401k?PghPharmBoy wrote: ↑Mon Mar 27, 2023 8:42 am @MrJedi -
Not being argumentative, but OP said their company deposits matching funds once per year in the following calendar year. This isn’t that unusual and I’m wondering if the discrepancy has to do with how the deferrals from each paycheck were set up. There was nothing mentioned about a catch-up payment.
OP - I would call your payroll department to get clarity. As others have said, code AA denotes a Roth contribution to your 401k and the amount listed should have generated a much bigger match for you.
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Re: How does my employer figure the 401k match?
Is the match 100% on up to 4% of compensation, or perhaps 50% on up to 4%? That would result in 2%.erp wrote: ↑Mon Mar 27, 2023 1:11 amIt sounds like there's only 1 lump match so this wouldn't work. (if you're talking about OP's own contributions being below 4%, then you have a typo in your original suggestion which is probably the confusion)Hyperchicken wrote: ↑Sun Mar 26, 2023 11:55 pmYou keep shooting down every suggestion your are given. It's your money. Figure it out.passive101 wrote: ↑Sun Mar 26, 2023 11:53 pmThe only way I can see what they put in for the match is looking at the 401k website.Hyperchicken wrote: ↑Sun Mar 26, 2023 11:52 pm You may need to go pay check by pay check, and see where your match is below 4% of your gross pay check amount.
OP, has the 4% match always been correct in previous years? Were you paid in different categories before too? But there's no subset of those categories that add up to 36k, so it doesn't seem like that's the problem.
btw your categories add up to about 72k instead of 74k. Also 1445 is exactly 2% of the 72k - I don't know if that's just a coincidence or a clue.
ETA: Just reread OP, and he does specify 100% of 4%.
Last edited by teen persuasion on Mon Mar 27, 2023 9:08 am, edited 1 time in total.
Re: How does my employer figure the 401k match?
Let's look at this the other way... What is your contribution percent?
To get to the 401k amount you listed, based on the detailed income you listed (which doesn't match your annual growth), you'd need to be contributing something like 22.7% of every income source.
If that sounds too high, then my guess is the total amount you are seeing is the combination of your and employer contributions.
If that sounds right, then something is off somewhere else - as the numbers don't make sense...
To get to the 401k amount you listed, based on the detailed income you listed (which doesn't match your annual growth), you'd need to be contributing something like 22.7% of every income source.
If that sounds too high, then my guess is the total amount you are seeing is the combination of your and employer contributions.
If that sounds right, then something is off somewhere else - as the numbers don't make sense...
Re: How does my employer figure the 401k match?
A "match" is by definition always based on your contributions. It sounds like what you have is not a match at all, more like a "safe harbor profit sharing contribution." These do not depend on you contributing anything at all, it's something the employer has to provide to get out of doing certain plan testing. However they have a lot of flexibility on when to provide it. I had a previous employer (small company) that would make the contribution based on 3% of your total compensation in August of the following year! The way to check this is see if your lump sum "2022 match" is actually 4% of your 2021 gross.passive101 wrote: ↑Mon Mar 27, 2023 8:48 amIs the 401k match usually based on the annual pay or how much I contribute to the 401k?PghPharmBoy wrote: ↑Mon Mar 27, 2023 8:42 am @MrJedi -
Not being argumentative, but OP said their company deposits matching funds once per year in the following calendar year. This isn’t that unusual and I’m wondering if the discrepancy has to do with how the deferrals from each paycheck were set up. There was nothing mentioned about a catch-up payment.
OP - I would call your payroll department to get clarity. As others have said, code AA denotes a Roth contribution to your 401k and the amount listed should have generated a much bigger match for you.
If it turns out this is what you have, and you ever leave this job for whatever reason, do not immediately rollover these funds to another plan; wait until the final employer contribution is made based on your prior year earnings.
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Re: How does my employer figure the 401k match?
Of the 5 income types you list - it's possible the 4% max is based upon only 3 out of 5 of these. Or maybe you have a commission target (and exceeded it) and they only match 4% of hourly+commission-target. In any case - it's hard to reverse engineer what they might be doing - you need to ask payroll how they calculated the amount or read your terms document in more detail.
Also - as stated - make sure the "match" is based upon 100% of your contributions and not 50% or something (sounds like 4% salary is a cap and not the match percentage for sure based upon numbers).
Also - as stated - make sure the "match" is based upon 100% of your contributions and not 50% or something (sounds like 4% salary is a cap and not the match percentage for sure based upon numbers).
Re: How does my employer figure the 401k match?
Just contact your HR and ask them to explain. Most of the above discussion is conjecture. You need facts.
Explaining such stuff is part of their job. No need to be accusatory, just be pleasant and ask how it is calculated so you can "better plan this year's contribution" or some such. Best to get the 401k documentation in writing and not just a verbal from HR.
Explaining such stuff is part of their job. No need to be accusatory, just be pleasant and ask how it is calculated so you can "better plan this year's contribution" or some such. Best to get the 401k documentation in writing and not just a verbal from HR.
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
Re: How does my employer figure the 401k match?
And if HR doesn't know, reach out to your plan administrator and ask them.calmaniac wrote: ↑Mon Mar 27, 2023 10:04 am Just contact your HR and ask them to explain. Most of the above discussion is conjecture. You need facts.
Explaining such stuff is part of their job. No need to be accusatory, just be pleasant and ask how it is calculated so you can "better plan this year's contribution" or some such. Best to get the 401k documentation in writing and not just a verbal from HR.
The sad reality is there is very few plans work the same, and the differences can range between subtle to drastic. So the only way to understand how your plan works, is to talk with the people who understand your plan.
Per the posts above, something is clearly off...
Per my prior post, you might gain some insight comparing your contribution % versus the actual contribution. But if your contribution is accurate, something is really off...
Working backwards, $1445 / 4% = $36,125, which doesn't line up with any of your income items... So the numbers as shared don't seem to make sense... We can only "guess"... But your HR/plan administrator should be able to explain these to you...
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Re: How does my employer figure the 401k match?
I did 20-26% the whole year. This year I bumped it up to 28%SnowBog wrote: ↑Mon Mar 27, 2023 9:02 am Let's look at this the other way... What is your contribution percent?
To get to the 401k amount you listed, based on the detailed income you listed (which doesn't match your annual growth), you'd need to be contributing something like 22.7% of every income source.
If that sounds too high, then my guess is the total amount you are seeing is the combination of your and employer contributions.
If that sounds right, then something is off somewhere else - as the numbers don't make sense...
Re: How does my employer figure the 401k match?
Congrats to you! That's an awesome savings rate!
As to your OP, I'm afraid you'll need to work with your HR and/or plan admin folks.
At I noted before:
My assumption is the 4% would be based on your income eligible for 401k, which might exclude some things. But based on your prior numbers, there's no obvious connection to your income and the 4% amount you listed. So we are missing something...
But when you find the answer, please share! My curiosity is peaked.
As to your OP, I'm afraid you'll need to work with your HR and/or plan admin folks.
At I noted before:
So unless that $36,125 number is meaningful to you, it's a mystery that I don't think anyone here can answer...
My assumption is the 4% would be based on your income eligible for 401k, which might exclude some things. But based on your prior numbers, there's no obvious connection to your income and the 4% amount you listed. So we are missing something...
But when you find the answer, please share! My curiosity is peaked.
Re: How does my employer figure the 401k match?
Every match I have seen that is not per contribution is a percentage of salary only or salary and bonus. I have never seen tips or commissions included.
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Re: How does my employer figure the 401k match?
Where are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals?passive101 wrote: ↑Sun Mar 26, 2023 12:09 am My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
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Re: How does my employer figure the 401k match?
Pretax and Roth both get the same 4% @100%. I can see what was put into the 401k. They only do it once a year and it goes in as company stock.toddthebod wrote: ↑Mon Mar 27, 2023 2:51 pmWhere are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals?passive101 wrote: ↑Sun Mar 26, 2023 12:09 am My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
Re: How does my employer figure the 401k match?
Must read your plan docs.passive101 wrote: ↑Mon Mar 27, 2023 3:06 pmPretax and Roth both get the same 4% @100%. I can see what was put into the 401k. They only do it once a year and it goes in as company stock.toddthebod wrote: ↑Mon Mar 27, 2023 2:51 pmWhere are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals?passive101 wrote: ↑Sun Mar 26, 2023 12:09 am My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
Most common matching schemes....
"A partial matching scheme with an upper limit is more common. Assume that your employer matches 50% of your contributions, equal to up to 6% of your annual salary. If you earn $60,000, your contributions equal to 6% of your salary ($3,600) are eligible for matching. However, your employer only matches 50%, meaning the total matching benefit is still capped at $1,800. Under this formula, you must contribute twice as much to your retirement to reap the full benefit of employer matching."
Link to complete article:
https://www.investopedia.com/articles/p ... -works.asp
Re: How does my employer figure the 401k match?
Matching with company stock is not a good thing.
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Re: How does my employer figure the 401k match?
How much did your company stock fall last year?!passive101 wrote: ↑Mon Mar 27, 2023 3:06 pmPretax and Roth both get the same 4% @100%. I can see what was put into the 401k. They only do it once a year and it goes in as company stock.toddthebod wrote: ↑Mon Mar 27, 2023 2:51 pmWhere are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals?passive101 wrote: ↑Sun Mar 26, 2023 12:09 am My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19
How did they come up with the $1445? I thought they would put in 4% of my annual income?
I am paid a combination of hourly, commission, and tips (If that matters)
Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84
Here's my prediction: paycheck by paycheck, they internally account for the match in shares of company stock at the market value at that time. Then, the next year, they transfer the shares all at once, regardless of what happened to the share price along the way.
Also, this stock is in a separate account from your contributions, right? Because the match should all be pre-tax.
Re: How does my employer figure the 401k match?
This is called "TRUE-UP". My company does this too. The employer match shows up on Jan-31 paycheck of the following year. Depending on your view point, it is either advantageous or disadvantageous. From my view point, it is advantageous as it would free me from having to calculate the exact percentage per paycheck, and sweating whether any bonus I am eligible for would make me miss the maximum employer match.PghPharmBoy wrote: ↑Mon Mar 27, 2023 6:39 amOP - I’ve worked for a company that did this. The match was provided in one lump sum in March of the following year. There was never any accounting for it anywhere - it just appeared in the 401(k) on a certain date.passive101 wrote: ↑Sun Mar 26, 2023 11:17 pmYup. They only contribute 1x for last year in the following year. I’ve worked for a factory that did the same thing. They do it, because if you quite or get fired before that date they don’t have to pay you anything and you forfeit it.lazybones18 wrote: ↑Sun Mar 26, 2023 11:16 pm "Yup, they only put money in from last year in a lump some the following year."
what do you mean by this ?
employer contributed for year 2022 in the year of 2023 ? I have never heard of this
usually they should match 4% of your every weekly paycheck.
e.g. your weekly paycheck is $2,000. You contribute $80. Employer should contribute/match $80 in the same weekly pay period
Currently I set 50% of my paycheck to Traditional 401(k), 10% of the paycheck to Roth 401(k), and 10% of the paycheck to after-tax 401(k) which gets converted to Roth 401(k) as quickly as possible. With 70% of my paycheck going to the retirement, my first 8 paychecks of the year, after other deductions such as healthcare premiums, transit expenses, etc. is just $200 per paycheck ...
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Re: How does my employer figure the 401k match?
I’m looking over the 401k rules and it says since I’ve been with the company for 3 years that I’m only 40% vested. Is this why the number could be lower?
It does say that tips are not included towards the 401k match. However it says everything else that is taxable is considered. So that should be the Hourly, over time, PTO, and commission. That should be $44,583.94 (everything else added together)
That should come to $1783.36 if it’s 4% of that I think.
It does say that tips are not included towards the 401k match. However it says everything else that is taxable is considered. So that should be the Hourly, over time, PTO, and commission. That should be $44,583.94 (everything else added together)
That should come to $1783.36 if it’s 4% of that I think.
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Re: How does my employer figure the 401k match?
I SOLVED THE MYSTERY!
Thank you everyone for helping me narrow down what I was missing. Some of you were right I think. I completely missed this. They put 1/2 of the match in cash and 1/2 of the match in company stock. I don’t know where the cash is in the account, but I was looking through the contributions. On 3/6 and 3/10 of this year their are 2 contributions. The totals are $1480.72 & $1480.71 These 2 together equal $2961.43 which is exactly 4% of my total gross earnings of $74,035.86
Maybe the cash just goes into the Vanguard S&P 500 fund that I have chosen for my investment here. I’m not certain. I’m now also more confused by reading the 401k rules that say tips aren’t figured into the 401k match, but I guess they must be
I’m going to put this in the first post as well.
Thank you everyone for helping me narrow down what I was missing. Some of you were right I think. I completely missed this. They put 1/2 of the match in cash and 1/2 of the match in company stock. I don’t know where the cash is in the account, but I was looking through the contributions. On 3/6 and 3/10 of this year their are 2 contributions. The totals are $1480.72 & $1480.71 These 2 together equal $2961.43 which is exactly 4% of my total gross earnings of $74,035.86
Maybe the cash just goes into the Vanguard S&P 500 fund that I have chosen for my investment here. I’m not certain. I’m now also more confused by reading the 401k rules that say tips aren’t figured into the 401k match, but I guess they must be
I’m going to put this in the first post as well.
Re: How does my employer figure the 401k match?
OP, I suggest editing the title of the first post in the thread too, putting "[Solved]" as prefix, including the square parentheses