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Administrator Guide
Last Updated: 2024-10-18
Example: Create a Step-Based Calculation for a 401(k) Employer Match Amount (USA)

Example: Create a Step-Based Calculation for a 401(k) Employer Match Amount (USA)

Your 401(k) retirement savings plan includes an employer match on both 401(k) pretax and 401(k) Roth post-tax employee contributions. The employer match contribution is tiered:
  • 100% is matched on the first 3%.
  • An additional 50% is matched above that, capped at 6%.
When calculating the match, you want to consider the IRS individual contribution limit. When the employee reaches the IRS limit for the year, you want to calculate the corresponding match based on the actual employee percent in that period, as opposed to the employee's elected percent.
When calculating the actual employee percent, you want to round to the nearest 0.001.
You want to create a step-based calculation to calculate the matched percent.
  • Define a pay component group named
    Retirement Savings Eligible Wages
    .
  • Define a pay accumulation for total employee contributions named
    401(k) Total Contributions: EE [USA]
    .
  • Create a step-based condition group named
    Matched Percent
    .
  • Create 2 step-based conditions named:
    Prior Value < = 0.03
    ,
    Prior Value > 0.03
  • Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
Security:
  • Set Up: Payroll (Calculations - Generic)
     domain in the Core Payroll functional area.
  • Set Up: Time Off (Calculations - Generic)
     domain in the Time Off and Leave functional area.
  1. Access the
    Create Step Based Calculation
     task and enter these values:
    Option Description
    Name
    401(k) + Roth ER Match Calculated Percentage
    Category
    Payroll
  2. Add these steps to the
    Step Details
     grid:
    Use the plus in the far left column to add a row as a new step. Use the plus to the right of the
    Condition
     column to add a row to the
    Operations
     sections within a step. The step numbers aren't visible until you click
    OK
     and save the calculation.
    Step
    Condition Group
    Condition
    Operation
    Type
    Value
    1
    Set
    Calculation
    401(k) Total Contributions: EE [USA]
    Divide
    Calculation
    Base (unprorated)
    Round
    Rounding Definition
    Round to nearest .001
    2.1
    Matched Percent
    Prior Value < = .03
    Exit
    Prior Value
    2.2
    Matched Percent
    Prior Value > .03
    Min
    Numeric
    .06
    Subtract
    Numeric
    .03
    Multiply
    Numeric
    0.5
    Add
    Numeric
    .03
  3. Click
    OK
    .
The step-based calculation that you created runs when the value of the
Base (unprorated)
 calculation is greater than zero.
Workday calculates the tiered employer match based on a total employee 401(k) and 401c(k) Roth calculated percentage for the pay period being processed. When the individual annual contribution limit for those deductions is reached in a period, the calculated employee percentage is less than the actual employee elections. Workday then bases the match percentage on the lower percentage in that period.
Create a deduction to calculate the 401(k) employer match.