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:
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A catch-up over age 50 payroll item is assigned to the employee
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The employee is 50 years or older in the current calendar year
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The employee reached their annual elective deferral limit
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:
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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:
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Go to Lists > Employees > Employees.
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Click Edit next to an employee.
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Click the Human Resources subtab.
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In the Birth Date field, enter or select the employee’s date of birth.
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Go to Setup > Payroll > Setup Tasks > Set Up Payroll.
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Click the Preferences subtab.
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Check the Decrease Elective Deferral Limits and Automatically Calculate Catch-Up box.
Warning:Do not set this preference if you use 457(b) plans.
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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
- Setting the Subsidiary for Payroll
- General Payroll Preferences
- Enabling Employees to Update Direct Deposit Information
- Specifying When Employees Can View Paychecks
- Setting Default Accounts for Payroll
- Setting Preferences for Jurisdictions
- Setting Specific Tax Rates
- Setting Up Email Alerts for Payroll Issues
- Payroll Preferences