401(k) Benefit Plan - An Overview
Last modified 6/18/2020 8:21:38 AM EST | Added by Paywow Team

An employer can administer a 401(k) Retirement Plan in PayWow. These are defined contribution plans where both employee and employer can make contributions. The employee contributions are automatically deducted from their paycheck for each pay period and are pre-taxed. 

Refer Benefits Administration in PayWow to learn more about other benefits that can be administered in PayWow.

Adding a 401(k) Plan

PayWow lets the employer manage 401(k) benefit plan offered to their employees.  Depending on the Contribution Type, employer’s contribution to the plan is first set up. Employees who are part of this benefit plan are then linked.  Finally, individual contributions from these employees are entered.  Refer Adding a 401(k) Benefit Plan in PayWow to learn more.

Contribution Type

The matching contribution to 401(k) from an employer is driven by the Contribution Type chosen when a benefit is added. This would determine the $ amount an employer and employee would contribute to that benefit.  Refer  Employer Contribution to 401(k) Benefit Plan based on Contribution Type to learn more.

Fixed-Dollar Contribution 

A 401(k) benefit plan with a Fixed Dollar Contribution type allows the employer to choose fixed % of the employee's contribution or fixed $ amount. Refer Step by Step - Adding Fixed Dollar Contribution Type 401(k) Plan to learn more.

Percentage of Gross Pay

A 401(k) benefit plan with the Percentage of Gross Pay Contribution type allows the employer to choose fixed % of the employee's gross pay. Refer Step by Step - Adding Percentage of Gross Pay Contribution Type 401(k) Benefit Plan to learn more.

Dollar-to-Dollar Match

A 401(k) benefit plan with $ to $ Match Contribution type allows the employer to match $ to $ employee's contribution to the 401(k) plan. Refer Step by Step - Adding $ to $ Match Contribution Type 401(k) Benefit Plan to learn more.