How much does a 401(k) cost a small business?

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).

Can a small business offer 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.

How do I set up a 401(k) for my small business?

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.

Can a small business owner have a 401(k)?

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.

Can owners of an LLC contribute to a 401(k)?

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.

ADP 401k Essential for small business

Simple, affordable, and easily customizable retirement plans backed by the experience and service of ADP®.

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All the benefits of a 401(k), and we do the work for you

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.

Simplicity

From our powerful plan dashboard to helpful administrative services like notification delivery and IRS filings, we make it easy.

Compliance

ADP takes on fiduciary responsibilities for you. This includes both administrative and investment management - so you can stay focused on your business.

Flexibility

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.

One plan, plenty of options

Not only do you get a full-featured 401(k) with transparent pricing,
you even get tax credits to offset fees¹.

Everything you need in a
flexible, customizable plan.

Real-time SmartSync® payroll integration and reporting
3(16) Administrative fiduciary support
3(38) Investment management support
Compliance readiness and testing
Government filings (Forms 5500, 1099-R, etc.)
Easy, guided employee self-enrollment
State of the art employee mobile app and financial planning tools

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Easy setup and enrollment

Anytime, on-demand enrollment
English and Spanish support
Text to enroll feature

Seamless payroll integration

Automated deferrals
SmartSync real-time payroll integration

Compliance Ready

Notice and disclosure delivery
Trustee services and ERISA bond
Form 5500 handling

Helpful employee tools

ADP mobile app
ADP Achieve employee education
Financial wellness program

Administrative support

Third party fiduciary support
Plan health dashboard
Built-in investment management

Smart plan features

SaveSmart deferral tool
Hardship withdrawals
Roth 401(k) contributions

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Estimate your baseline cost

Number of participants must be between 1 and 49

Monthly Fee for standard plan
Participant Fee

($4/mo per participant)
Investment Service Fee²

$150.00
$ —
$20.83

Baseline Estimate³

(Customization may affect rates)

$ — /mo

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.

There’s more to consider than just the monthly fee

When saving for retirement, small percentages can make a big difference. ADP's fee
structure can help you maximize long term earning potential.

Learn how a 0.5% fee difference can really add up⁴.

ADP named best employee retirement plan for businesses with 100 or fewer employees by Business.com*

Let's get started

Whether you want something simple and turn-key or need to customize,
we're here to help. Let's have a conversation.

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Small business 401(k) FAQ

How much does a 401(k) cost a small business?: 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).
Can a small business offer 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.
How do I set up a 401(k) for my small business?: 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.
Can a small business owner have a 401(k)?: 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.
Can owners of an LLC contribute to a 401(k)?: 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.

More than a transaction - a matter of trust

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).

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ACHIEVING MORE

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*Business.com article "Best Business Employee Retirement Plans of 2023" published on April 28, 2023.

ADP cannot provide tax or legal advice. Clients should discuss with their tax advisor. Only registered representatives of ADP Broker-Dealer, Inc. (ADP BD), Member FINRA, an affiliate of ADP, Inc., One ADP Blvd, Roseland, NJ 07068 or, in the case of certain products, a broker-dealer firm that has executed a marketing agreement with ADP, Inc., may offer and sell ADP retirement products or speak to retirement plan features and/or investment options available in such ADP retirement products.
Strategic Plan Services, LLC (SPS) is an SEC Registered Investment Adviser. SPS will assess an annual fee for its investment management services equal to 0.10% of Eligible Assets, subject to a monthly minimum as described in the following sentence. This annual fee will be billed monthly, will be subject to a monthly minimum of $20.83. ADP will collect this fee on behalf of SPS and will calculate this fee for each billing period by multiplying (1) the average daily balance of your Plan’s Eligible Assets as reflected on ADP’s recordkeeping system for the billing period, times (2) the Daily Rate (0.10% divided by the number of days in the calendar year), times (3) the number of days in the billing period. The average daily balance of Eligible Assets for each billing period will be reflected on your invoice. Eligible Assets include all Plan assets except (1) those invested in Plan Sponsor Investment Options (as defined in your Investment Management Agreement) and (2) any outstanding participant loan balances (for this purpose, outstanding participant loan balances include outstanding loans that have been deemed distributed under Internal Revenue Service regulations and any accrued interest on such deemed distributions).
ADPRS-20230511-4498
Prices vary based on customization.
All data and information shown is for illustrative purposes only and is not representative of any plan or participant. Assumes $3,000/year contribution and 7% annual return.

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Set up a free retirement plan review and receive a $50 Amazon.com Gift Card*

Let us help you understand the generous tax credits your business could be eligible to receive.

*Restrictions apply, see amazon.com/gc-legal

Full Name

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Are you a current ADP client? Yes No

Your privacy is assured.

ADP 401k Essential for small business

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