In order for Guideline to conduct required annual plan administration activity for your 401(k) plan, you are required to report compensation for employees and owners in your company. Compensation data allows Guideline to complete important tasks for your plan, such as nondiscrimination testing, limits testing, and any requested profit sharing.
At the beginning of each calendar year, you’ll receive a task on your dashboard where you can report owner and employee compensation. Compensation must be reported for all eligible employees from the previous calendar year, even if they were never active in your Guideline 401(k) plan. You’ll want to complete the task in a timely manner so Guideline can meet all compliance and profit sharing deadlines.
💡 If you used a 360˚ payroll partner (except OnPay, Miter, Paylocity, or Quickbooks Desktop) for the entire year, you do not have to submit compensation for W-2 employees. This information will be provided to us automatically through your integrated payroll provider.
Reporting employee compensation
You are required to report total compensation for all eligible employees through the compensation task in January if you:
Use a non-integrated payroll provider, have a self-service plan, or use OnPay, Miter, Paylocity, or Quickbooks Desktop.
Have any owners who earn self-employment income and the sponsoring entity is taxed as a sole proprietorship or partnership (W-2 wages only are only counted for owners of entities taxed as a corporation, including S Corps);
Switched your payroll provider during the year
Moved to Guideline from a different provider this year
What you will need
Final total compensation data for every employee who was eligible in the 2023 plan year. You can typically pull an annual “gross compensation” report from your payroll provider.
If you changed your payroll provider mid-year, you may need to collect compensation amounts from your previous provider and combine the amounts with your current provider for accurate information.
Reporting owner self-employment income
If you have any owners who earn self-employment income, you will need to submit this information regardless of your payroll provider. Because self-employed individuals are not paid through payroll, we cannot pull that information from your payroll provider.
💡 Typically, businesses with the entity type of sole proprietorship, partnership, or LLC partnership have owners with self-employment income. Legally, the 401(k) plan can only consider the W-2 compensation of S-corporation owners.
What you will need
Self-employment earnings
What you report on your Form 1065 Schedule K-1 Line 14A if the sponsoring entity is taxed as a partnership
What you report on schedule C (Form 1040), Part II, Line 31 if the sponsoring entity is taxed as a sole proprietorship
Partner’s share of expenses
If the entity is taxed as a partnership this is typically the same as ownership percentage and you can find this on your Form 1065 Schedule k-1, line J capital, ending %
Reporting compensation for larger companies
If your company has more than 75 employees, you can upload a spreadsheet with compensation data to your Guideline dashboard when prompted with the compensation task. However, the spreadsheet must include certain information and meet our formatting requirements.
To ensure reports are processed quickly and accurately, here are several tips for upload:
File format must be CSV: Be sure to upload your compensation report as a .csv file. Here is more information on how to generate a .csv file format:
Microsoft - Save a workbook to text format (.txt or .csv)
Apple - Save a copy of a Numbers spreadsheet in another format
Report must include column headers: Confirm that your report includes the exact headers as the template we provide in the task for all of the columns. For your convenience, and to reduce the chance of issues with the report, you’re encouraged to use our template.
Report must include all required information: Review your report to confirm it includes all employees eligible in the prior year. The following information should be included for each employee in separate columns:
First name
Last name
Birth date formatted as MM/DD/YY
Total gross compensation - do not include commas or dollar signs