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Employer 401k Match Calculation Incorrect When Arrears Amount is Deducted (Doc ID 469549.1)

Last updated on JULY 02, 2018

Applies to:

Oracle HRMS (US) - Version 11.5.10.2 and later
Information in this document applies to any platform.

Symptoms

The 401k employer match calculation is not taking arrears 401k contributions into account when they are deducted from the employee


Example:

An employee has chosen a 10% deferral for 401k.  The employer match should be 2%.

In Week 1 their paycheck only included the Flex Credits they received.
In week 1, their paycheck shows that no 401k deferral or match were calculated (the deferral amount for week 1 went into arrears).

In week 2, the employee did not work again - and their paycheck (again) only included flex credits.
In week 2, no 401k deferral or match were calculated (week 1 and week 2 deferrals are now in arrears).

In week 3, the employee worked and was paid for their hours worked.
The deductions on their check for week 3 include:

401k deferral (amount which equals Week 1 + week 2 + week 3)
401k employer match (amount which equals the amount from week 3 only)

The calculation did not include the company match value from week 1 and week 2 (we assumed it should have also been put in arrears).

DETAILS:

Week 1 check Gross pay: $23.27
Week 1 401k deferral deduction (on paycheck): $0.00
Week 1 401k employer 2% match (on paycheck): $0.00
Week 1 401k deferral (calculated amount): $2.33 (not on paycheck due to lack of $)
Week 1 401k employer 2% match (calculated amount): $0.47 (not on paycheck)

Week 2 check Gross pay: $23.27
Week 2 401k deferral (on paycheck) $0.00
Week 2 401k employer 2% match (on paycheck): $0.00
Week 2 401k deferral (calculated amount): $2.33 (not on paycheck due to lack of $)
Week 2 401k employer 2% match (calculated amount): $0.47 (not on paycheck)

Week 3 check Gross pay: $198.91
Week 3 401k deferral (on paycheck): $24.55 (19.89 + 2.33 + 2.33)
Week 3 401k employer 2% match (on paycheck) : $3.98 (2% of 198.91) (does not match what we expected)
Week 3 401k deferral (calculated amount): $19.89 (10% of 198.91)
Week 3 401k employer 2% match (calculated amount): $3.98 (2% of 198.91)

The issue seems to lie with the 401k employer 2% match in week 3.

The 401k employer 2% match for week 1 and week 2 should have been held - along with the 401k deferral into week 3. Week 3's 401k employer 2% match should have been $4.92 (3.98 + .47 + .47).




Changes

 

Cause

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