How to calculate 401k Gross Ups

How to calculate 401k gross-ups for employees looking to contribute their entire Net Pay to reach the yearly limit.

OVERVIEW

Calculate and adjust an employee 401k Gross-Up within a Pay Cycle in the Payroll Center.



To start, review the applicable employee's past pay cycle to determine the usual 401k amount and their normal Net Pay amount.

  • You can do this by going to their profile in Namely Payroll > Pay History and viewing their last paycheck. If there is already a YTD amount for the 401k, be aware of the remaining balance allowed (Note: Catchup amount is part of the remaining balance for employees 50 and over).

BY PAY CYCLE

  1. After confirming the new amount, go to your Payroll Center and select the upcoming pay cycle.

  2. Go to Step Two of the pay cycle by selecting Save & Continue at the bottom of the screen.

  3. Find the applicable employee's name and click the pencil icon next to their name under Actions.

  4. Scroll down to Deductions and enter the full amount of the net pay in the Employee Amount box. 

    • The Employee Amount Type will need to be set to $.

  5. Scroll down to Withholding and Tax and select the Suppress option to suppress Federal and State.

     

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  1. Click Save Changes > Calculate Payroll.

  2. Verify the net pay is zero.