401(k) Deferral Deposit Deadline
DOL 7-business-day safe harbor for depositing employee 401(k) deferrals.
These calculators are for informational purposes only and do not constitute legal, financial, or professional advice.
How the 401(k) Deferral Deposit Deadline works
The 401(k) Deferral Deposit Deadline calculator applies the Department of Labor's safe harbor rule for depositing employee salary deferrals withheld from payroll into the plan trust. For small plans — generally those with fewer than 100 participants — DOL regulation 29 CFR § 2510.3-102 creates a safe harbor: deferrals deposited within 7 business days of withholding are automatically treated as timely, no further analysis required.
Large plans get no such safe harbor. The controlling standard instead is that deferrals must be deposited as soon as they can reasonably be segregated from the employer's general assets — which in practice is often just a few business days, not weeks. The commonly cited "15th business day of the following month" is an outside regulatory limit under a separate rule, not a safe target, and depositing that late on a large plan is a red flag in a DOL audit even if technically inside the outer limit.
Late deposits are treated as a prohibited transaction and a fiduciary breach — the employer typically owes the plan lost earnings on the late amount and may need to file Form 5330 and pay an excise tax, even for a delay of just a few days past the applicable standard.
Worked example
A small plan with 60 participants withholds employee deferrals from a payroll run on July 1. Depositing by July 10 (the 7th business day after July 1) falls inside the small-plan safe harbor and is automatically timely. A large plan with 400 participants running the identical payroll has no such safe harbor — depositing on July 10 might still be scrutinized as too slow if the employer could reasonably have segregated the funds in 2 or 3 business days instead.
Frequently asked questions
What counts as a "small plan" for the 7-business-day safe harbor?
Generally a plan with fewer than 100 participants at the start of the plan year. The safe harbor is a bright-line rule specific to these plans — deposits within 7 business days of the payroll withholding date are automatically deemed timely, without needing to separately prove how quickly the funds could have been segregated.
Is the "15th business day of the following month" a safe deadline for large plans?
No — that figure is an outside limit under a related DOL bonding and reporting rule, not a safe harbor for large plans. The actual standard for large plans is depositing as soon as the funds can reasonably be segregated from company assets, which in practice is usually just a handful of business days, well before the 15th-business-day outer limit.
Is this ERISA or tax advice?
No — this is general information based on 29 CFR § 2510.3-102, not legal or fiduciary advice for a specific plan. Plan sponsors facing a late deposit, or unsure whether their process complies, should consult an ERISA attorney or third-party administrator — self-correction programs exist but have their own deadlines and requirements.