Applies to: Payroll customers (Basic and Full Service) with a non-safe harbor 401(k) plan through Vestwell
This article explains how to enter your company match formula in Patriot Payroll after setting up a non-safe harbor 401(k) plan with Vestwell.
A non-safe harbor 401(k) plan is a retirement plan that gives employers flexibility in how and whether they make contributions, but does not automatically satisfy IRS nondiscrimination testing the way a safe harbor plan does. If you have a non-safe harbor plan, Patriot does not automatically receive your company contribution formula from Vestwell because this type of contribution is at the employer's discretion and subject to change.
If you have told Vestwell that you intend to offer a company match, Patriot will automatically create company-level contributions for your account, but all contributions will default to 0%. You need to update these contributions with your actual match formula before running payroll.
If you choose not to give a match, no action is required.
Video Walkthrough
The video shows how to enter company match formulas for your Vestwell non-safe harbor 401(k). The article details each step below.
How to Enter Your Company Match Formula
Go to Settings > Payroll Settings > Deductions & Contributions.
In your Contributions list, you will see match contributions already set up by Patriot. You need to enter your match formula on all four match contributions to cover every combination your employees may elect (dollar amount vs. percent, and pretax vs. after-tax/Roth):
VW 401(k) $ — Pretax, dollar amount
VW 401(k) % — Pretax, percent
VW Roth 401(k) $ — After-tax (Roth), dollar amount
VW Roth 401(k) % — After-tax (Roth), percent
VW 401(k) NE — This is a non-elective contribution, not a match contribution. A non-elective contribution goes to each eligible employee regardless of whether the employee contributes their own money. Most non-safe harbor employers will not use this contribution type. Only use the VW 401(k) NE contribution if your plan specifically includes a non-elective contribution.
Click Edit at the end of the row for the first match contribution.
Entering a Single or Tiered Match Formula
Each match contribution is set up to support a multiple-tiered match formula. If you only have a single formula, enter your match formula on the first row and leave the other two rows blank.
For example, if your match formula is 50% of the first 6% of pay, the formula entry screen would show Tier 1 set to 50% match up to 6% of pay, with Tiers 2 and 3 left blank.
For additional examples of how to enter single-tier and multi-tier formulas, see Using Company Contribution Formulas.
Unless your plan includes a specific annual cap, leave the monthly and annual limit fields blank.
Company match contributions are not required to be reported on Form W-2, so you may leave the W-2 reporting field blank.
Click Save.
The formula you enter for one contribution will automatically be applied to the other three match contributions (VW 401(k) $, VW 401(k) %, VW Roth 401(k) $, and VW Roth 401(k) %). You only need to enter the formula once.
Confirming Your Changes
After saving, the contribution formula you entered will automatically be applied to all employees who have a Vestwell 401(k) deduction set up. No additional steps are needed at the employee level.
To confirm that your formula has been applied correctly, run the Assigned Contributions report: go to Reports > Payroll Reports > Deductions & Contributions > Assigned Contributions, select only the Vestwell 401(k) contributions, and click Run.