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. 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 over age 50 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 and higher catch-up (catch-up age 60 – 63) 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 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