1. Employee Management
  2. Payroll
  3. SuitePeople U.S. Payroll
  4. Payroll Setup
  5. Payroll Preferences
  6. Setting up Automatic Catch-up Over Age 50 Calculations

Setting up Automatic Catch-up Over Age 50 Calculations

You can set a preference to automatically calculate catch-up over age 50 for respective retirement plans. NetSuite automatically calculates catch-up over age 50 for employees who meet the following criteria:

When this preference is set, you can also decrease the elective deferral and catch-up over age 50 limit for specific employees. For more information, see Decreasing Elective Deferral Limits for an Employee.

To set up automatic catch-up over age 50 calculations:

  1. Ensure employees included in payroll have the correct birth date on their records. You can add a birth date to an existing employee by doing the following:

    1. Go to Lists > Employees > Employees.

    2. Click Edit next to an employee.

    3. Click the Human Resources subtab.

    4. In the Birth Date field, enter or select the employee’s date of birth.

  2. Go to Setup > Payroll > Setup Tasks > Set Up Payroll.

  3. Click the Preferences subtab.

  4. Check the Decrease Elective Deferral Limits and Automatically Calculate Catch-Up box.

    Warning:

    Do not set this preference if you use 457(b) plans.

  5. Click Save.

After an eligible employee reaches their annual elective deferral limit, NetSuite automatically calculates catch-up over age 50 using a weighted average.

For example, an employee over 50 years old might contribute $400 to their retirement plan per pay check. They already contributed $19,200 in the current calendar year to their retirement plan. They are also assigned a catch-up over age 50 payroll item. In the next payroll, $300 is automatically deducted for their standard 401(k) plan and $100 is deducted for 401(k) catch-up over age 50.

Related Topics

General Notices