Savings Plan Employer Contribution Is Incorrect When Using The Service Step Table For Before And After Tax Deductions And/Or Multiple Plans (Doc ID 1083559.1)

Last updated on JULY 02, 2024

Applies to:

Symptoms

The service step table setup for employer contribution/match doesn't calculate correctly for before and after tax contributions or across multiple plans.

With the following scenario:

Saving plan is setup to allow before tax and after tax contribution, and matching is setup to use service step table to match at 100% for the first 3% and 50% for the next 4% of employee earnings, whether contributions are made before-tax or after-tax. The maximum employer contribution/match should not exceed the total of 5%. When employee election of 5% before tax and 5% after tax, the deduction calculated on the paycheck is getting full match at 100% for the first 3% and 50% for the next 4% for before tax and 100% for the first 3% and 50% for the next 4% after tax.


EXPECTED BEHAVIOR
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When employee election of 5% before tax and 5% after tax, the deduction calculated on the paycheck should be the same as the following example:
Employee earnings = $2000
Employee election: 5% Before Tax, 5% After Tax
Employer Contribution/Match: $2000 x 100% x 3% = 60 + ($2000 x 50% x 2%) =20 = $80 PTax Benefit
$2000 x 50% x 2% = $20 Nontaxable Benefit

ACTUAL BEHAVIOR
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When employee election of 5% before tax and 5% after tax, the deduction calculated on the paycheck is getting full match at 100% for the first 3% and 50% for the next 4% for before tax and 100% for the first 3% and 50% for the next 4% after tax.
Example with Employee earnings = $2000
Employee election: 5% Before Tax, 5% After Tax
Employer Contribution/Match: $2000 x 100% x 3% = 60 + ($2000 x 50% x 2%) = $80 PTax Benefit
$2000 x 100% x 3% = 60 + ($2000 x 50% x 2%) = $80 Nontaxable Benefit

STEPS
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1. Enroll an employee in the Savings Plan with 5% before-tax contribution and 5% after-tax contribution (Navigation: Benefits > Enroll in Benefits > Savings Plans).
2. Run an on-line check for the employee (Navigation: Payroll for North America > Payroll Processing USA > Create Online Checks > Create Online Check).
3. Check the deductions on the calculated paycheck.

Cause

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