Your plan start date is typically the date on which your 401(k) benefits will become active in your payroll account, and the date that eligible employees will be automatically enrolled in the plan if they have not already self-enrolled or opted out.
This means that if your scheduled pay date falls shortly after your plan start date, you should wait until at least your plan starts to run payroll for 401(k) deductions to be withheld or employer contributions to be included for that pay period.
See what your auto-enrollment timeline will look like and how it may affect your plan participants’ deferrals:
Plans that use Gusto or integrated payroll
Your start date refers to the effective date of your 401(k) plan, and is the date on which eligible employees may begin participating in the plan. This is also the date on which our 401(k) integration with your payroll provider becomes active. Here’s what you can expect:
Your payroll provider will receive each participating employees’ 401(k) deferral election and apply the deduction to their paychecks.
Employee changes to their deferral election after your start date will automatically sync to payroll by the following day.
Self-service plans
As a self-service plan, by your start date, you will need to review your plan sponsor dashboard to gather your employees’ payroll deductions to update payroll. A few notes:
Before you run payroll, you should ensure all employee deferral rates and employer contributions (if applicable) have been entered (or updated, if deferral election changes have been made).
Once you’ve processed payroll, you will need to upload a payroll journal at least 2 days before the scheduled pay date to ensure we are able to process contributions in a timely manner. Any delay in uploading a complete payroll journal may delay processing, and potentially resulting in lost earnings being owed to participants or payment of excise tax penalties due to contributions not being deposited in a timely manner.
As a self-service plan, you will need to complete this process each time you run payroll for your company.