Enter your headcount, the match you'd offer (0 is allowed), and average pay. The estimator assumes plan administration of $1,500 plus $40 per employee per year — an assumption, not a quote — then applies the §45E and §45T credits with the real formula to show your estimated net cost in year one and in years two and three.
Your business
Estimated employer cost
Assumptions used
- Administration is assumed at $1,500 base plus $40 per eligible employee per year. That is a market midpoint we chose for illustration — it is not a quote from any provider, and real quotes vary in both directions.
- All employees are treated as non-highly-compensated for the §45E cap ($250 × NHCEs, floor $500, ceiling $5,000). If some staff earn over the HCE threshold your cap may be lower — the tax credit calculator lets you set NHCEs separately.
- §45E covers 100% of admin cost (up to the cap) for 50 or fewer employees, 50% for 51–100, $0 above 100; §45T adds $500 a year. Both run three years, so years 2–3 are estimated like year 1.
- Match cost assumes full participation at the full match — deliberately conservative. Statewide CalSavers data shows roughly 35% of employees opt out of retirement saving even when auto-enrolled.
- The employer contribution credit (up to $1,000 per employee) is not applied, so a matching employer's real net cost may be lower than shown.
- Excluded: investment returns, payroll integration fees, state taxes, and the value of tax deductions.
Year 4 exists. The startup credits run out after three years, and the plan's gross cost is what you pay from then on. Sizing the match so the plan makes sense without credits is part of doing this properly.
Common questions
Where do the admin figures come from?
They are illustrative — $1,500 plus $40 a head — chosen to be in the range small-plan recordkeepers quote. Get real quotes before deciding; the estimator shows the shape of the first year, not the invoice.
Can the credits exceed the admin cost?
The § 45E credit cannot exceed the qualified cost that generated it, but the flat $500 § 45T credit sits on top, so total credits can exceed admin on a very small plan. The page says so when it happens.
Is the match a cost or a benefit?
Both. It is real money out of the business, and it is deductible compensation that goes to the people you employ — including the owner.
Get quotes instead of assumptions
We will price your actual plan with real providers, apply the credits, and show you the same walk with real numbers.