Georgia Employers' 401(k) Withholding Calculator
One of the best ways to retain top employees, in addition to offering competitive salaries, is by providing a 401(k) retirement plan. Employees can participate by contributing either a fixed dollar amount or a percentage of their gross salary from each paycheck. While many employers offer a matching contribution as a valuable perk, the IRS does not mandate this matching.
Calculating 401(k) deductions correctly requires careful attention, so we designed a calculator specifically to help you figure out your employees’ take-home pay quickly and accurately. Simply enter a few details about your staff’s plan participation at the top of this page, and the Beyond calculator will handle the rest of the work for you.
Why Offer a 401(k) Plan to Employees?
As tax-deferred retirement accounts, 401(k) plans are highly beneficial to your employees because contributions are exempt from being taxed in the current year. Let’s look at a quick example of how this works:
Imagine Sally makes $5,000 a month. If we keep things simple and assume she is in the 20% federal tax bracket and pays no other taxes, her tax obligation would be $1,000.
But let’s say she decides to contribute 10% (or $500) of her monthly salary to her 401(k) account. Her taxable income now shrinks to $4,500, so her tax obligation also decreases from $1,000 to $900. That $500 she contributes monthly remains tax-free until she is eligible to withdraw it from her plan at age 59.5.
Note that the maximum amount your employees can contribute to their 401(k) plan changes each year. For 2025, the limit is $23,500.
Understanding the Types of 401(k) Plans
There are essentially three different types of 401(k) savings plans an employer can offer. These include traditional 401(k) plans, safe harbor plans, and SIMPLE plans. Below is a short overview of each, and we have an in-depth resource on the basics of 401(k) for small businesses that goes into more detail. You can also see how the IRS defines each plan here.
| Plan Type | Key Features |
| Traditional | Employees save through pre-tax payroll deductions; employers can optionally match contributions. Subject to non-discrimination testing known as ADP (Actual Deferral Percentage) and ACP (Actual Contribution Percentage) to prevent the plan from unfairly favoring highly compensated employees. |
| Safe Harbor | This plan skips the non-discrimination testing required for a traditional plan, but it mandates that employers make fully vested contributions. It can be combined with other retirement plans. |
| SIMPLE | Geared toward small businesses, these are designed for companies with 100 or fewer employees. Not subject to testing, and combining this plan with other savings programs is not permitted. |
Employer Matching and Plan Requirements
Is Employer Matching Required?
In most cases, employers are not required by law to match an employee’s 401(k) contributions, though many businesses choose to offer some level of matching voluntarily. This is because offering a match can help a company stand out when recruiting top talent or encouraging high-performing employees to remain with the company.
Typical 401(k) matches can range from 50% of employee contributions to 100% matches. Ultimately, the decision on whether to match and how much to match is entirely up to the discretion of each company.
Are Employers Required to Provide Access to Retirement Savings?
In recent years, some states have passed laws mandating that employers offer their employees access to retirement savings plans. However, this doesn’t always mean a business must provide a 401(k) plan; the requirement is often for access to a retirement savings plan generally. Furthermore, the requirements for the minimum number of employees a company must have vary by state.
– For example, Oregon’s plan is an Individual Retirement Arrangement (IRA) that every employer must provide unless they already have a qualified plan in place.
– On the other hand, Virginia’s auto-IRA only requires employers with 25 or more employees to provide their workers access to a retirement savings plan if they don’t already have one on the books.