How the excise tax penalty for late deposit 401(k) deferrals is calculated

In general, the excise tax penalty is equal to 15% of the "amount involved." The amount involved is defined by the IRS as the "missed" earnings attributable to the deposited funds.

The Department of Labor (DOL) offers an online calculator that can be used for this purpose. Use of the DOL calculator is not mandatory.

Plan sponsors should consult with their professional retirement plan administrators, attorney or professional tax advisor to properly determine the amount of the excise tax and report it on IRS Form 5330. Zenefits is not a tax advisor and does not provide tax advice or complete Form 5330 for companies.