Currently, when an employee has an "add to" calculation (for example a weekly bonus) and a matching contribution with a max (say a Simple IRA), there is an option to make the calculation method "% of Gross + Paygroup benefit", but the only option under the Max Type is % of Gross. So, the Max will never calculate based off the bonus calculation.

So, to flush this out, an employer does a 3% matching contribution on simple IRA deductions. An employee gets paid $1,000 a week. He has a bonus of $200 a week for some reason, but that bonus amount changes from year to year, where the salary doesn't change. SO, the employee Simple IRA contribution they want to make is 3%. The employee side is set up w/ a calc method of % gross + paygroup benefit. So, they can get 3% of $1,200 to calculate correctly. On the employer side, since the "max type" is only "% Gross/Check", the 3 percent match will be calculated on $1,000 ONLY - thus shorting the employee of their 3% match on the $200 bonus.

I believe the solution is to add a max type of % gross + paygroup benefits.

by: Ryan W. | over a year ago | Payroll