401(k) Eligible Income – Justworks Help Center

Income eligible for 401(k)

Certain types of payments are considered eligible for 401(k) deferrals and matches. If a payment type is considered compensation and eligible for 401(k), employee deferrals will apply, and if applicable, employer contributions will also apply.

What is included?

If your employer offers your 401(k) plan through Slavic401k, “eligible compensation” includes all W2 wages paid through Justworks. This includes, but is not limited to, regular salary or hourly wages, bonuses, and commissions. Please note, Severance Pay is not included as eligible compensation for 401(k) deductions.

If your 401(k) is not with Slavic401k you should review your Plan Document for your plan’s specific definition of eligible compensation.

Deferrals Through Your Slavic401k Account

When you initially enroll with Slavic401k, the deferral rate you specify will be the rate applied on all eligible payments. This means if you elect 6% traditional (pre-tax) when enrolling, by default, all eligible pay processed through Justworks will have 6% deducted for your 401(k).

If you are receiving a bonus or commission, by default, it will also have 6% applied against the payment, unless you have elected a separate deferral rate for bonuses and commission payments. Any applicable employer match will also apply to all eligible payments.

Separate Bonus and Commission Deferral Elections

If you would like to set up a different deferral percentage or flat dollar amount for bonus and commission payments, you can do so through Justworks. Start by logging into Justworks and under the Benefits tab select Retirement Benefits. Then click into “see details” on the Slavic card. You can view and edit your contribution rates from there.

As these changes can be applied directly on the platform, they will apply to the next payment that is processed. We always recommend speaking with your admin to coordinate any contribution changes with scheduled bonus or commission payments.

You will be able to see your updated deferral election in “You → Benefits → Retirement Planning” immediately.

The election you make will be applied to all bonus and commission payments going forward until you log in and update your deferral amount.

Please note, if you do not set up a separate deferral election for bonus and commission payments, your deferral rate for your regularly scheduled salary payments will apply to all bonus, commission, and supplemental payments.

Please note that if you would like to change the deferral rate for your regularly scheduled salary payments, you will need to do so in your Slavic401k account.

Regularly Scheduled Pay

If you have a separate bonus deferral election submitted, it will not impact your regular salary deferrals.

For example:

If you have 6% traditional (pre-tax) elected through your enrollment and selected a bonus and commission deferral rate of 10% traditional (pre-tax), your regularly scheduled pay will still have the 6% deduction while bonus and commission payments will reflect the 10% you elected.

However, if you do not set up a separate deferral election for bonus and commission payments, your deferral rate for your regularly scheduled salary payments will apply to all bonus, commission, and supplemental payments.