Vestwell 401(k) Plan Deductions & Contributions | Patriot Payroll

Payroll Help

Your Payroll Software questions answered here

Vestwell 401(k) Plan Deductions and Contributions 

COMING SOON…

After you set up your 401(k) plan with Vestwell, Patriot will send payroll data each time you run a payroll, including employee deductions and company contributions. Vestwell will withdraw these dollars directly from the employer bank account and apply the contributions to each employee’s 401(k) account.

Not yet signed up for a 401(k) with Vestwell? Learn more about Vestwell plan options and get started here.

After you complete your onboarding process with Vestwell, Patriot will receive your plan-level and employee-level information needed to set up your payroll account accordingly. You have very little to zero work to do in your Patriot account once we set everything up for you!

One important distinction for you to know is whether or not your 401(k) plan is a safe harbor plan.  If you’re unsure if you have a safe harbor plan, please contact Vestwell or check your plan highlights in your Vestwell employer portal. For more information, check out our blog article, Safe Harbor 401(k) Plans.

401(k) plan deductions and contributions

As a Vestwell customer, here’s a rundown of how your 401(k) plan deductions and contributions will look in Patriot and how employee elections will be maintained. Let’s review four settings in your Patriot account:  

  1. Company-level deductions
  2. Company-level contributions
  3. Employee-level deductions
  4. Employee-level contributions

Did you know? In Patriot, there are both company-level and employee-level deductions and contributions. Typically, you must set up company-level deductions and contributions before assigning them to employees (Settings > Payroll Settings > Deductions and Contributions). But with Vestwell 401(k) plans, we’ve got you. We’ll automatically set up the company-level deductions and contributions you need.  

1. Company-level deductions 

Patriot will automatically set up multiple company-level deductions for you when we receive your 401(k) plan setup information from Vestwell. 

Automatic company-level deduction settings include:

  1. Flat dollar deduction (pretax)
  2. Percentage deduction (pretax)
  3. Roth 401(k) flat dollar deduction (after tax)
  4. Roth 401(k) percentage deduction (after tax)
  5. Loan payment deduction (for more details, see How to Set Up a 401(k) Loan Repayment Deduction)

Although these company-level deductions are available, you may not use all of them. The deductions you use depend on employee elections. However, you won’t be able to edit these pre-set deductions. We need to keep these deductions “locked” for accurate reporting.

2. Company-level contributions

Patriot will automatically set up corresponding company-level contributions for you when Patriot receives your plan information. This is to accommodate the different employee election variables.   

Similar to deductions, you may not use all contributions, depending on your plan variables and employee elections.

For safe harbor Vestwell plans:

Have a safe harbor Vestwell plan? If so, employer contributions are mandatory. Vestwell will communicate with Patriot your contribution selection to employee accounts. If you choose a 3% nonelective contribution for all eligible employees (even if they do not contribute), you’ll see one nonelective contribution set up at the company level called “VW 401(K) NE.”

If you choose to give a match only for employees who do contribute, you will see a set of four contributions added, to cover all of the possible employee elections:  

  • VW 401(k) $ = Match for employees deferring a flat dollar amount, pretax
  • VW 401(k) % = Match for employees deferring a percent of pay, pretax
  • VW Roth 401(k) $ = Match for employee deferring a flat dollar amount, after tax
  • VW Roth 401(k) % = Match for employees deferring a percent of pay, after tax

You will not be able to edit these preset contributions.

For non-safe harbor Vestwell plans:

Employer contributions are voluntary if you have a non-safe harbor plan. So, you can choose how much of a match to give or whether to give one at all. 

If you choose not to give a match, you will have no contributions set up at the company level.  

If you choose to give a match, Patriot will not receive your match formula from Vestwell. If you want to set up an employer contribution, you will need to enter your own match formula at the company level so that Patriot can automatically apply it correctly to each employee. 

For instructions, see Non-safe Harbor Plans: How to Enter Your Company Match Formula.

3. Employee-level deductions 

We’ve got some great news: As a Vestwell customer, there’s no work on your end to maintain employee 401(k) deductions in Patriot!  

As Patriot receives employee election information from Vestwell, we’ll use the appropriate deduction that was set up at the company level and automatically set up a deduction on the employee’s record with their elected amount, either a percent or dollar amount, or pretax or after tax (Roth). 

Employee deductions will not be editable (to ensure accurate payroll data is sent to Vestwell).

4. Employee-level contributions

Similar to employee deductions, Patriot will automatically set up the appropriate company contribution, based on whether the employee has elected to contribute a percent or dollar amount, or pretax or after tax (Roth). 

Employee contributions are also not editable (to ensure the payroll data is properly sent to Vestwell).

Employee deferral changes

Employees who want to change their deferral election amount will do this through their Vestwell platform. Instructions on changing the employee deferral election amount are on the Vestwell site. You will not be able to change employee deferral election amounts in Patriot. The employee deduction and contributions will be “locked” and unable to be edited here. 

Patriot will rely on Vestwell to send us the employee’s updated election amount. Once we receive the change from Vestwell, we will change the employee’s deduction and employer contribution. This normally happens within one business day.  

The timing of the employee’s change will depend on several factors:  

  1. When the employee changes their election in their Vestwell portal
  2. How soon Vestwell sends that update to Patriot
  3. The next time payroll is run in Patriot

What can you edit in Patriot? Quick-reference chart 

Here’s a summary of the four settings in your Patriot account and what can be edited in Patriot:

Safe Harbor 401(k) Plan; Match RequiredNon-Safe Harbor 401(k) Plan; Match AllowedNon-Safe Harbor 401(k) Plan; Match Not Allowed
Can Edit Company-level Deductions?NO, automatically set by PatriotNO, automatically set by PatriotNO, automatically set by Patriot
Can Edit Company-level Contributions?NO, automatically set by PatriotYESNO, company level contributions will not be shown or available 
Can Edit Employee Deductions?NO, automatically set by PatriotNO, automatically set by PatriotNO, automatically set by Patriot
Can Edit Employee Contributions?NO, automatically set by PatriotNO, automatically set by PatriotNO, automatically set by Patriot

How to confirm employee settings

Once everything’s set up, before running your next payroll, we recommend running the Assigned Deductions and Contributions reports so you can confirm everything is correct.  

Go to Reports > Payroll Reports > Deductions &  Contributions > Assigned Deductions > Select only the Vestwell 401(k) deductions > Select “Active” for the Status > Run. This will give you a list of all employees and their assigned deductions. Repeat the same step for Assigned Contributions by clicking the link at the top of the page.

Now that your employee and company contributions have been automatically set up, Patriot will send payroll information to Vestwell for any payrolls you run going forward. See our help article, Running a Payroll with a Vestwell 401(k) Plan.

Was this page helpful?

Get Started
See a demo

Want to check out the software before your free trial?

See a Demo
Get Started
Try it free

Sign up today for a free, no-obligation 30-day trial.

Try It Free for 30 Days