NetSuiteautomatically applies the Annual Limit for Retirement Plan Contributions inpayroll. This includes 408(p), 401(k), 408(k)(6), 403(b). A payroll cannot becalculated if an employee already exceeded the limit as shown in theexample below:
Assuming thatEmployee A is eligible for the 401(k) and has a year to date contribution of$17,500.00.
1. Navigate to Transactions> Employees> CreateIndividual paycheck.
2. SelectEmployee A as the Payee.
3. Enter the Period Ending Date and the Check Date.
4. Under Earnings tab, select his Earningpayroll item and enter the Rate.
5. Under Deductions tab, put $1000.00 for the401(k).
6. Click on the Calculate button.
The system willthrow an error telling that the employee exceeded the Deduction's annual limitas shown below:
Following deduction amounts have been foundover the year to date limit in the current payroll.
Employee Name: Employee A, Deduction Type:408(p), 401(k), 408(k)(6), 403(b), Amount Over The Limit: 500.00, Annual Limit:18000
To resolvethis, edit the employee's paycheck and modify the 401(k) rate in order not toexceed the Annual Limit.
1. After seeingthe error message, click on the Go Backbutton.
2. Change theemployee's 401(k) contribution to just $500.00.
3. Click on the Calculate button and Commit the payroll.
Note: A separate payroll item needs to be usedfor employee's contribution in excess of the standard limit. This is onlyapplicable for employees who are over the age of 50.
The 2016pension plan limitations have not changed; 401(k) limit is still $18000.