Deductions and Contributions: SIMPLE IRA

Calculation of the Employer Contribution:
1. 1. For the SIMPLE IRA, the employer match is limited to 3% of the employee's TAXABLE INCOME.
  2. TAXABLE INCOME is gross wages after pre-tax deductions.
  3. The employer match is based on the employee's entire calendar year compensation, regardless of when the employee starts or stops. The max is alway 3% of the employees' compensation for the entire year.
Managing the employee contribution and the employer match for businesses that pay hourly:
1. 1. Employee deductions need to be expressed as a fixed amount as the system can not do a calculation on taxable income.
  2. The employer match:
    1. 1. For hourly employees we are hard setting the employer match to 3% of their full-time taxable compensation at their current hourly pay rate recognizing that if they work overtime we will need to input an adjustment at the end of the year.
        
        The adjustment would be 3 percent of their annual taxable compensation less any employer contribution already recorded capped by their actual total deductions.