How Concurrent Catch-Up Deductions Are Calculated

When you set up catch-up contributions for deferred compensation deductions, such as 401 (k) and 403 (b), you can elect that the payments be deducted concurrently with the base payments.

This means that with each pay period, the payroll process applies two deductions, one for the base contribution and one for the catch up, up to the yearly statutory limits.

What Settings Affect Concurrent Processing

When you define the element for 401 (k) or Roth 401 (k), select Concurrent as the catch-up processing method. This allows concurrent processing of the deductions.

For 403 (b), 457 (b), Roth 403 (b), and Roth 457 (b) deferred compensation deductions, you select the concurrent catch-up processing method through the Catch-Up Processing Rule calculation value on the person's Benefits and Pensions card.

How the Payroll Process Calculates Concurrent Deductions

When you start a payroll run, here's how the process calculates the base and catch-up contributions.

1. Calculates the regular contribution amount based on the base contribution element's settings.

2. If the statutory limits for regular contributions haven't yet been met, deducts the regular contribution.

3. Calculates the catch-up contribution amount based on the catch-up deduction element's settings.

4. If the statutory limits for catch-up contributions haven't yet been met, deducts the catch-up contribution. This amount is deducted at the same time as the base contribution.