Annual Compensation Limit for Pretax Deductions

The payroll process automatically enforces an annual compensation limit on your employees' deferred compensation contributions.

How You Can Disable This Limit

In cases where your employees aren't subject to the annual compensation limit, you can disable the limit at the organization level.

1. Start the appropriate task from your implementation project, depending on if you're setting this value for a payroll statutory unit (PSU) or tax reporting unit (TRU).

   • Legal Entity Calculation Cards

   • Legal Reporting Unit Calculation Cards

   The value you set on the TRU card overrides the value on the PSU card.

2. Select Benefits under the Component Groups.

3. Under Calculation Components, click Create.

4. Select the Pension Plan calculation component.

5. Select 401(k), and click OK.

6. Select Enterable Calculation Values on Calculation Cards, and click Create.

7. Select Enforce Eligible Compensation Annual Limit Check.

8. Select No.

   By selecting No, the payroll process continues to perform employee deductions up to the annual deduction limit, even if the annual compensation limit has been reached.

9. Click OK, and save your changes.

How You Can Override This Limit

You can use the following to override this limit.

These overrides	Work with these contribution types
Override IRS Annual Compensation Limit	401 (k) 403 (b) Roth 401 (k) Roth 403 (b)
Override IRS Employer Annual Compensation Limit	403 (b) employer-match Roth 403 (b) employer-match
Override IRS Employer Catch-Up Annual Compensation Limit	403 (b) employer-match catch-up Roth 403 (b) employer-match catch-up

For further info, see Contribution Limits for Deferred Compensation Plans in the Help Center.