Are You Meeting the DOL Deposit Deadline for 401(k) Salary Deferrals?

By Mike Murphy, FiduciaryShield – “When is the deadline for depositing employee salary deferrals into my 401(k) plan?”  This is a question I frequently hear from 401(k) plan sponsors. The confusion often stems from 2 factors:

1.The timing rules for depositing employee elective deferrals differ from the rules related to company contributions such as matching, profit-sharing contributions, or other employer contributions. These are often mistakenly interchanged.

2.The Department of Labor (DOL) language on this topic lacks clarity. The DOL rule for 401(k) salary deferrals states:

“An employer is required to deposit salary deferrals as soon as the employee assets can be reasonably segregated from employer assets, but no later than 15 business days of the month following the month in which the payroll deduction occurred.”

Additional commentary suggests that salary deferral deposits to a 401(k) plan must be made by the due date of an employer’s Form 941 tax deposit. For employers with over 100 employees, the deadline is the next day after payroll.

For plans with fewer than 100 participants, the DOL finalized regulations on January 14, 2010. These regulations establish a “safe harbor” grace period of 7 business days following the payroll deduction date.


Employers with 100 or more employees: Deposit employee payroll deductions no later than your Form 941 payroll tax deposit date.

Employers with fewer than 100 employees: Deposit employee payroll deductions no later than the 7th business day following the payroll date.

Mike Murphy is vice president of ERISA consulting at FiduciaryShield, a retirement plan fiduciary administrator and compliance company.

Topics: #401k #salarydeferral #depositdeadline #401kFiduciary