1. Employee Management
  2. Payroll
  3. SuitePeople U.S. Payroll
  4. Payroll Setup
  5. Payroll Preferences
  6. Setting Up Automatic Catch-Up Age 60 – 63 Calculations

Setting Up Automatic Catch-Up Age 60 – 63 Calculations

You can set a preference to automatically calculate catch-up contributions for employees ages 60 to 63. NetSuite automatically calculates the catch-up over contributions for employees who meet the following criteria:

To set up automatic catch-up age 60 – 63 calculations:

  1. Ensure employees included in payroll have the correct birth date on their records. To add a birth date to an existing employee:

    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.

    5. Click Save.

  2. Assign a catch-up age 60 – 63 payroll item to an employee record. For the steps, see Setting up Deductions for an Employee.

    To update employee records in bulk, see Updating Payroll Items for Multiple Employees.

    Important:

    To support automation, make sure both standard (catch-up over age 50) and higher catch-up contributions are assigned to the employee's record.

  3. Then, go to Setup > Payroll > Setup Tasks > Set Up Payroll.

  4. Click the Preferences subtab.

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

    Warning:

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

  6. Click Save.

After an eligible employee reaches their annual elective deferral limit, NetSuite automatically calculates catch-up contributions for ages 60-63. When the limit is first exceeded, the excess amount is reallocated to corresponding catch-up items. On subsequent paychecks, catch-up contributions are calculated using the specified rate. When a catch-up limit is reached, the contribution for each catch-up payroll item are distributed using a weighted average.

When an employee turns 60, their total contribution limit increases from $30,500 to $34,250 as the employee becomes eligible for the higher catch-up contribution. When an employee turns 64, the higher catch-up contribution no longer applies and the standard catch-up over 50 calculation applies.

Related Topics

General Notices