beliavsky[at]aol.com wrote:
- quote -

Hmm, two very similar questions at the same time (see other thread
"Yearly 401k contributions in one quarter").

Based on research I did when opening my own Individual 401(k) (sole
proprietor), employees can only make contributions via elective salary
deferrals, which must be written and signed *prior* to the pay period
they take effect. No retroactive contributions allowed by employee.

So, once the employer deducts FICA, the entire remaining amount could
potentially be contributed to your plan, since there will be no income
tax withholding (none of your contribution is subject to current income
tax).

-Mark Bole

Suppose someone earns $10000 per month but is only eligible to
contribute the employer 401(k) plan starting December 1 (the last pay
date of the year). The 401(k) contribution limit for 2006 is $15000.
What is the maximum he can have his employer put in the 401(k) on
December 1 -- is it $10000? Or is it less because the employer must
deduct Social Security, Medicare federal and state income taxes? Or is
there a maximum percentage of pay that can be put in the 401(k) each
period, even if no contributions have been made earlier in the year?