401(k) Plan 401(k) Plan Costs: This worksheet is for general estimating cost Example Your Company purposes only and plan fees are indicative of the industry, not a specific plan. Costs to 1. Number of eligible employees 40 add funds, substitute funds or for loan set-up fees, if such costs are applicable from the plan 2. Average salary $30,000 provider, are not included. You should speak with your financial advisor regarding specific options 3. Number of employees you think will participate 24 and costs for 401(k) plans and contribution limits for business tax deductions. 4. Total employee salary for those who may participate (Multiply line 2 by line 3) $720,000 5. Maximum contribution your plan will allow 12% 6. Average you think your employees will contribute 8% 7. Employee contributions (Multiply line 4 by line 6) $57,600 Matching Employer Contributions: Discretionary Match* — The employer can contribute to each eligible participant’s account a percent of the participant’s elective deferral. The employer will set the percentage prior to the beginning of the year, not to exceed 25% of the participant’s salary. Tax Credit 8. Estimated employer match per participant For employers with fewer than 100 eligible for each $1.00 contributed employees, a 50% tax-credit for startup (i.e., 25% for $0.25 on the $1.00 plans – 50% of cost up to a maximum or 100% for $1.00 on the $1.00) 50% of $500 is available. 9. Maximum percent of participant’s This credit is available for the first three (3) years elective deferrals matched 6% of the plan and cannot exceed $500 in any year. If you are starting a new plan in one of the years 10. Total employee salary from line 4 $720,000 above, please consult with your tax advisor for more information. 11. Multiply line 8 by line 9 by line 10 $21,600 a. Recordkeeping fees/Trustee fees $2,400 b. One-time set-up fee $1,000 Total: First-year plan administrative costs $3,400 c. Add discretionary matching employer contribution (Line 11) $21,600 Amount of potential business tax deduction $25,000 * There are other matching employer contribution options available such as non-discretionary match, tiered match or flat dollar match, to name a few.
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