Backed by decades of experience and trusted by over 1 million small businesses, payroll leader ADP offers 401(k) plans that make it easy to provide employees with a retirement benefit.
From our powerful plan dashboard to helpful administrative services like notification delivery and IRS filings, we make it easy.
ADP takes on fiduciary responsibilities for you. This includes both administrative and investment management - so you can stay focused on your business.
Our standard plan fits most small businesses and you can modify eligibility requirements, matching contributions, and more to get a plan that fits you best.
SECURE 2.0 Act Tax Credit Calculator
Discover your potential savings with SECURE 2.0
Offering a 401(k) plan is more affordable for small businesses than ever, thanks to new tax credits introduced by the SECURE 2.0 Act.
You could be eligible for an estimated
in tax credits over the plan's first 5 years!
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Total Record-keeping Fees†|
|Monthly Total Participant Fee|
|Monthly Investment Service Fee|
|SECURE Start-up Tax Credit|
|Automatic Enrollment Credit|
|Estimated 401(k) Start-up Cost|
|Matching Contributions Credit|
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Whether you want something simple and turn-key or need to customize,
we're here to help. Let's have a conversation.
401(k) costs vary and fee structures differ from provider to provider. It is best to review each company's offering closely considering both near-term and long-term expenses as well as which fees are paid by the employer and the employee. Differences in pay fee structures can impact the long-term savings potential of the 401(k).
Yes, small businesses can offer a 401(k). There are plans designed for sole proprietors as well as companies with employees and each plan type has its own requirements and features. 401(k) plan providers often offer several options with varying fee structures.
Creating a 401(k) - sometimes called 'sponsoring a 401(k)' - involves a number of steps. Often times a plan provider will handle many of these steps for you. Activities required for establishing a 401(k) include selecting a plan, setting up a trust to hold plan assets, maintaining records of employee contributions and values, and providing information to plan participants. There are other administrative tasks as well like connecting your 401(k) plan contributions to your payroll process.
That depends. A small business owner who is actively involved in the business can participate in the company's 401(k) as an employee - making contributions on behalf of their own retirement savings. However, an owner who is passively involved may not be able to contribute. Consult with a certified financial advisor to better understand your options.
Sometimes. If you are a self-employed member of a small business that operates as an LLC, the IRS allows you to set up a 401(k) plan for yourself. But not every member of an LLC is eligible, as there are some restrictions. For example, the IRS doesn't consider a member’s passive involvement in an LLC as self-employment when no services are provided to the business. Such individuals may not be able to participate in that company's 401(k). Consult with a certified financial advisor to better understand your options.
Your employees count on you and you can count on ADP. We’re here to help you evaluate your choices and to provide tools and resources that make it easy to offer your own 401(k).
*Business.com article "Best Business Employee Retirement Plans of 2023" published on April 28, 2023.
† This calculator is for illustration purposes only and should not be construed as tax advice. Please consult with your own tax professional for advice.
Monthly Investment Service Fee: ADP Strategic Plan Services, LLC will impose a fee of .10% of covered assets, subject to a minimum fee of $20.83 per month, as more further described below.
The amount of the tax credit each year is limited. Employers with up to 100 employees may be entitled to an annual tax credit for three years equal to 50% of the costs of starting up and administering a retirement plan and for participant education services. Employers with 50 employees or fewer may be entitled to 100% of the costs for these services. The maximum credit is up to the greater of (1) $500 or (2) the lesser of (1) $5,000 or (2) $250 multiplied by the number of non-highly compensated employees eligible to participate in the plan. An additional credit of $500 per year for the first three years is available to plans that offer an automatic enrollment feature that meets the requirements of an Eligible Automatic Contribution Arrangement (EACA) as defined in Internal Revenue Code Section 414(w)(3.) The maximum credit over 3 years of $16,500 is available to plans that cover at least 20 non-highly compensated employees and offer automatic enrollment.
Additionally, an annual tax credit for eligible employer contributions for five years of up to $1,000 per employee earning $100,000 or less may apply to employers with up to 50 employees but phases out from 51 to 100 employees.
The availability and amount of a tax credit depends on your situation. ADP does not provide tax advice, and you should consult with your own tax professional.