Employer to withhold SIMPLE match

[luckylucy]

What is the name of your state (only U.S. law)? Florida

I am a health care professional and receive a straight percentage of my collections for the practice minus expenses (insurance, malpractice coverage, payroll taxes). I am in the process of negotiating my contract and my employer now wants to deduct the amount he contributes to my SIMPLE IRA plan. That is, if his 3% match totals 5K for the year, he will deduct that amount from my final bonus check. When I asked if that was legal I was told by his accountant that this is done very frequently. Still, that doesn't make it legal. What do you think? Is he allowed to deduct his contribution from my salary?

 

[cbg]

if his 3% match totals 5K for the year, he will deduct that amount from my final bonus check.

Is he allowed to deduct his contribution from my salary?

So which is it? Your bonus, or your salary?

 

[luckylucy]

Well, income, I guess, would be the best word. Technically, I don't get a salary...just a straight percentage of what money I generate, minus all expenses now including his contribution to my simple plan. So if I was supposed to receive 50K but he put in 5K into my retirement plan, my check (salary, bonus, whatever you call it) will be for 45K. Does that make sense?

 

[pattytx]

Why would you think it wouldn't be legal?

 

[davew128]

Still, that doesn't make it legal.

No the law makes it legal. This isn't a 401(k) where you can opt bonus checks out of a DC plan. A SIMPLE plan takes the withholdings on all cash compensation.

 

[pattytx]

The calculation of your income payable is whatever you agree to in your contract.