Overview
Wrapbook can withhold 401k retirement plan contributions from your W-2 employees' pay as part of the payroll process. Because Wrapbook does not remit funds directly to retirement plan providers, your company is responsible for making those payments. This article explains how the deductions work, what's included on reports and tax forms, and how to get set up.
Eligibility
401k deductions are available for W-2 employees only. They are not available for contractors or loan-out workers.
To get started, your account must be configured for 401k support by Wrapbook's team. Contact your Customer Success Manager (CSM) to initiate the setup process before your first payroll run.
Important: Setup must be completed before payroll is run. Notify your Wrapbook Customer Success Manager as early as possible to avoid delays.
How 401k deductions work in Wrapbook
Here’s a rundown of how how 401K deductions work in Wrapbook, including what Wrapbook does and what your company is responsible for.
What Wrapbook does
Withholds the designated 401k contribution amount from each eligible employee's wages during payroll processing
Reflects the withheld amounts on payroll reports and year-end W-2s
Returns the withheld amounts to your company via invoice credit (shown as an "auto rebate" on your reports)
What your company is responsible for
Making the actual contribution payments directly to your 401k plan provider
Reconciling the amounts returned via invoice credit against your plan's records
If a payroll reversal is requested on a payroll that included 401k deductions, confirming that the payment to the plan has not yet been made before the reversal can proceed. If a payment has already been made, you must contact your plan administrator for guidance before Wrapbook can process the reversal.
Important: Wrapbook does not send payments to your retirement plan provider on your behalf. The invoice credit returned to you represents the funds you will need to remit directly.
System limitations
Before setting up 401k deductions, please review the following limitations in Wrapbook:
Employer 401k matching is not supported
State specific retirement plans are not handled by Wrapbook
Percentage-based elections only. Deductions must be expressed as a percentage of wages (for example, 3%). Flat dollar amounts are not supported.
Traditional and Roth 401k plans only. Wrapbook supports traditional pre-tax 401k and Roth post-tax 401k plans. State-mandated IRA plans are not formally supported.
No self-service changes. Elections cannot be added, modified, or deleted by you or your workers directly. All changes must go through Wrapbook. Contact your CSM to request any updates.
No dedicated deduction reports. Wrapbook does not currently offer a standalone 401k deduction report. Use the Summary Earnings Report to review contribution data.
W-2 employees only. Contractors and loan-out workers are not eligible
Tax Reporting
401k contributions withheld through Wrapbook will be reflected on your employees' year-end W-2 forms. Your company is responsible for reporting the payments made to the plan on your own taxes. Consult your tax advisor for guidance specific to your situation.
Adding or Changing Elections
Because elections cannot be modified directly by production administrators or project workers, any changes to 401k contributions — including adding new workers to a plan, updating percentages, or removing elections — must be submitted to Wrapbook.
Important: If you decide to extend your 401k plan to additional workers, notify your CSM as soon as possible so the setup can be completed before the next payroll run.