Question 401K employer contribution

[Googlie]

ABC Tech Inc. sponsors 401(k) plan.
The Plan offers:

• Pre‐tax and Roth deferrals from 1% to
75% of eligible compensation
• $1 for $1 company match up to 6% of
an employee’s deferral
• If you do not make an election within
30 days of your hire date, you will be
automatically enrolled in the plan with
a 6% contribution
• 100% vested in all contributions
including employer match

 

If salary is $126,000 a year and employee plans to contribute $12,000 of his salary towards 401K in a year, how much will employer contribute 

 

 

[yemdoing]

35 minutes ago, Googlie said:

ABC Tech Inc. sponsors 401(k) plan.
The Plan offers:

• Pre‐tax and Roth deferrals from 1% to
75% of eligible compensation
• $1 for $1 company match up to 6% of
an employee’s deferral
• If you do not make an election within
30 days of your hire date, you will be
automatically enrolled in the plan with
a 6% contribution
• 100% vested in all contributions
including employer match

 

If salary is $126,000 a year and employee plans to contribute $12,000 of his salary towards 401K in a year, how much will employer contribute 

 

 

7560 emp will contribute ..

[Googlie]

7 minutes ago, yemdoing said:

7560 emp will contribute ..

Thanks bro - confused if it’s $7560 (126000*6%) or $720 ($12000*6%) because it says 6% of employee deferral 

[Galactus]

You need to contribute atleast 6% of 126,000 to receive full employer match of 6% so, 6 * 126000/100 = 7560

For your question, If you contribute 12,000, Employer will contribute 7560 so your year end total will be 19,560.

[chammakchandra]

1 hour ago, Googlie said:

ABC Tech Inc. sponsors 401(k) plan.
The Plan offers:

• Pre‐tax and Roth deferrals from 1% to
75% of eligible compensation
• $1 for $1 company match up to 6% of
an employee’s deferral
• If you do not make an election within
30 days of your hire date, you will be
automatically enrolled in the plan with
a 6% contribution
• 100% vested in all contributions
including employer match

 

If salary is $126,000 a year and employee plans to contribute $12,000 of his salary towards 401K in a year, how much will employer contribute 

 

 

How can someone make $126k if they can’t understand plain English 

[Googlie]

8 hours ago, chammakchandra said:

How can someone make $126k if they can’t understand plain English 

Got confused with “6% of
an employee’s deferral” means 6% of $12000 (employee contribution)