Currently, annual contribution limits for 401K employee deductions are calculated based on the Earnings date rather than the Pay date. So if wages are earned by 12/31/2017 but paid 1/1/2018 the annual limit will be applied from 2017 which may cause 401IK deductions to be skipped on that last/first pay period of the year. The 401K deduction amounts are reported based on the Pay date (i.e. 2018 in this example). Recommendation is to allow users to set annual limit calculation on benefits to use either earnings date or pay date.
Comments
Microsoft should provide a hotfix for this issue. We have many clients who are suffering from this bug,
The two workarounds appears to be adding the benefit to the pay statement manually which can be exhausting for companies with over 5,000 employees; or changing the payment date which is not feasible sometimes.
This is a compliance issue and Microsoft should provide a solution ASAP.
Category: Benefits
Ryan Sandness (administrator) on 2/15/2023 4:04:44 PM
Thank you for your feedback. Today we operate off of pay period end date when determining annual limits for benefit contributions.
Thank you for your suggestion. To help us in our review process, we’re requesting votes from the community to help us understand the importance of this functionality. This posting is provided “as is” with no warranties, and confers no rights.