not greater than formula

Question

Can I set up a payroll formula for my employer portion of Simple IRA to say 3% but not greater than the employees contribution? I have a few EEs who contribute a flat rate and I am not sure how to get them to calculate the 3% and then one who is paid hourly and does a smaller flat rate that might not be 3% of his gross. 
 
 Any help in creating this formula would be appreciated!! Thank you!

StephenC · Accepted Answer

The way I would go about it is to divide the employee contribution by their gross pay. That will give you a % for everyone, even if they contribute a fixed amount. Then use an if statement to decide if you should use that % or 3%. Once you have the correct percentage you can multiply it times their adjusted gross. In a formula, that would like something like this: 
 A=K401/ADJUSTED_GROSS; 
 B=IF(A<.03,A,03); 
 ANSWER=B*ADJUSTED_GROSS 
 You would substitute the name of your employee IRA deduction for K401 in the first line of the formula. I haven't tested that formula but it should give you a good start. 
 A Simple IRA has an annual limit, so technically you should add another section to the formula that checks the YTD employer contribution against the annual limit. But for 2017 I think the limit is $12,500. 12500 / .03 = $416,666.67. So the employee would have to make more than that to hit the limit. I'm guessing that isn't an issue. If I'm wrong and your company can afford to pay employees more than $400,000/year then I suggest you quit spending your time trying to figure this out and just call me and have me do it for you[:)]. I could probably get it worked out for no more than $100.

Sage 50 US

not greater than formula

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