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Timing on the Deposit of Employee 401(k) Contributions


The tax regulations require that participant contributions to a 401(k) be deposited to the plan on the earliest date that they can reasonably be segregated from the employer's general assets, but in no event later than the 15th business day of the month following the month in which the participant contributions are deducted from their pay. However, this does not mean an employer can routinely wait until the 15th business day to deposit funds because the general rule is that the deferrals be deposited as soon as is reasonably possible after the payday.


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