Managing 401(k) Plan Payroll

How do I upload payroll for my 401(k) plan?

If your 401(k) plan isn’t integrated with your payroll provider, don’t worry—you can still upload payroll manually:

1. Log in to the plan sponsor dashboard.
2. Select "Payroll" from the left-hand menu.
3. Click "Upload Payroll File".
4. Follow the on-screen instructions to upload your payroll file in the required format.
5. Review and approve the payroll for processing.

Betterment integrates with over 350 payroll providers, which means there’s a good chance your payroll system can sync automatically. If you’re currently doing manual uploads, it’s worth checking to see if an integration is available—this could save you time and reduce errors!

Watch this demo for more information.

What information needs to be included in the payroll file?

Use the pre-formatted file available in the dashboard. It includes all employees and their Social Security Numbers. Enter compensation and contribution amounts (pre-tax, Roth, employer match) for each pay period.

How do I approve a 401(k) payroll?

If your payroll isn’t set up for automatic approval, you’ll need to approve each submission manually:

1. Log in to the plan sponsor dashboard.
2. Go to the "Payroll" section.
3. Review the payroll details for accuracy.
4. Click "Approve" to submit for processing.

Payroll approval is only required for manual payrolls and for plans that have automatic approval disabled. If you’re looking to streamline the process, see if your plan is eligible for an integration or automatic approval.

How do I know my payroll file was successfully uploaded?

After uploading, the system displays a summary. You must review and approve the submission. 

What file formats are accepted for payroll uploads?

Use the file provided by Betterment in the dashboard. It is formatted for upload and should not be altered beyond filling in the required values.

Why do I have to keep approving payroll?

Payroll approval is required for:

• Manual payroll uploads.
• Plans with automatic approval turned off.

Automatic approval is available for plans with an integration and a single bank account on file for payroll processing. If your payroll system is integrated, you can enable automatic payroll approval under payroll settings. If you recently changed your payroll bank account, you’ll need to re-enable automatic approval after updating your settings.

How do I cancel a 401(k) payroll?

If you need to cancel a payroll before it’s processed:

1. Log in to the plan sponsor dashboard.
2. Go to "Payroll" and locate the pending payroll.
3. Select the payroll and choose "Cancel".
4. Confirm the cancellation.

Once payroll has been processed, it can’t be canceled. You can still make corrections. See the options below.

How do I correct a 401(k) payroll?

Mistakes happen, and correcting them is easy. You have two options:

1. Fix it through your payroll provider: If your plan has a payroll integration, making the correction with your payroll provider should automatically update your records in Betterment. No extra steps needed!
2. Let us help:  If an integration correction isn’t an option, reach out to Betterment, and we’ll guide you through processing the adjustment.

It’s always best to fix errors as soon as possible to keep contributions accurate and on track.  

How do I add or update a bank account for payroll?

If you need to update the bank account used for payroll contributions, follow these steps:

1. Log in to the plan sponsor dashboard.
2. Go to "Settings" > "Bank Account".
3. Select "Add New Bank Account" and enter the required details.
4. Once the new account is verified, remove the old account.

If you use automatic payroll approval, don’t forget to turn it back on after updating your bank account! Until then, payrolls will require manual approval.

What if a payroll file has an error or needs to be changed?

If a payroll is uploaded and unapproved, you can cancel the payroll and upload a corrected file. For plans integrated with a payroll provider, you may be able to cancel the payroll before approval and either upload a corrected file or have your provider resend it. (This is not available if you have automatic approval enabled.)

Once a payroll is approved, it cannot be canceled. If you need to add funds to an employee account, upload a new payroll file with the difference. If a payroll was overfunded, we’ll help process the correction using the appropriate steps. You’ll need to contact our support team for help.

For payrolls submitted through an integration, the data cannot be edited manually. If auto approval is turned off, the payroll can be canceled before approval. You can then upload a corrected file or have your payroll provider send a new one through the integration.

When are 401(k) contributions due after each pay period?

The Department of Labor requires that contributions be submitted as soon as reasonably possible after each payday. For small plans, this is typically within 7 business days.

What happens if I miss the contribution deadline?

Contact Betterment support to document the late submission and determine next steps for compliance.

Can I schedule payroll submissions in advance?

Yes. You can upload your payroll and set a future effective date. The payroll will not process until the effective date.

How long does it take for contributions to post to participant accounts?

Once funds are received via ACH, contributions typically post within a few business days.

How do I submit employer matching or profit-sharing contributions?

Enter employer match contributions in the designated column of the payroll file. Profit-sharing contributions can only be submitted during compliance testing. You’ll need to enter the profit-sharing request on the compliance questionnaire.

Can I submit off-cycle payrolls, such as bonuses or commissions?

Yes. Upload a separate payroll file for the off-cycle run using the same process.

How do I handle Roth vs. pre-tax contributions in payroll?

The payroll file includes separate columns for Roth and pre-tax deferrals. Enter each amount in the appropriate field.

How do I report missed deferrals or late contributions?

Submit the missed amounts in a new payroll file and notify Betterment support so they can assist with compliance tracking.

How do I issue a refund to a participant?

Refunds must be coordinated through Betterment. Do not return funds directly. Contact support for help.