18515: 401(k) Matching in Drake Accounting (DAS)

Many employers offer a 401(k) match option; this means that the employer will match the employee’s 401(k) contribution up to a certain percentage. To set up a 401(k) match:

1. Go to Employees > Options.
2. On the Payroll Options tab, enter the percentage of each employee’s 401(k) contribution (% of employee's paycheck) that the employer is matching. Contribution matching can be separated into two tiers: A% of the first B% of the employee's contribution, and C% of the next D%.
   • If the employer is making a dollar-for-dollar match, enter anEmployer Contributes percentage of 100. If the employer is not matching the employee’s contributions, enter 0.
   • In the example below, the company will match 100% (dollar for dollar) of the first 5% of the employee's paycheck that is put toward their 401(k). If the employee contributes more than 5% of their paycheck to their 401(k) account, the company will match 25% of the next 3%; the company will not match anything beyond 8% of the employee's paycheck.
     
     

     
     
     

3. Select whether the contribution is based on the employee's Gross Wages (before taxes and deductions are taken) or Net Wages (after taxes and deductions are taken).
   
4. The Deduction Limit is determined by the IRS and is accurate when the program is released. If this figure is changed by the government, you can either manually update it or wait for Drake Accounting to release an update.
5. The Catch-Up Limit is the additional elective deferral contribution amount allowed by the government and and is accurate when the program is released. If this figure is changed by the government, you can either manually update it or wait for Drake Accounting to release an update.
6. Click Save after all necessary adjustments have been made.
7. Next, go to Employees > Deductions & Benefits. When entering the 401(k) deduction, the Based On selection must be Percent. For information on setting up deductions and benefits, see KB 15125.
   
   

   

   
   
8. Click Save after setting up the deduction.
9. Navigate to Employees > Employee Setup. Select the applicable employee and go to the Deductions tab.
10. Select the applicable Available Deduction Name that represents the 401(k) and click the right arrow to assign the deduction to the employee. The deduction is displayed as Employee Deduction Name.
    
    
    
    
11. Click Save.
12. To see the employer’s 401(k) match amount once payroll is ready, go to Employees > Payroll, select either Live or ATF, and click the Additional Info link on the right-side of the screen.
    
    

    

    
    
13. On the Additional Check Info window, review the 401k Match line. Select the field to make any adjustments, if necessary. This information can also be seen in the 401(k) Listing report under Employees > Reports.