401K matching is a fantastic addition to your benefits package. It's a process in which you, the employer, contribute a certain amount of money to the employee's retirement account based on their individual contributions.
There are many ways to approach 401K matching. Your company might match a certain percentage of contributions based on salary. For example, you could do a 50 percent match up to 10 percent of the employee's salary.
Either way, 401k matching is worth considering when using software for benefits management. Read on to find out why.
Tax Benefits
Did you know that 401K matching can help you save on your company's tax burden? There are a few different tax benefits to take advantage of. However, the most impressive is using those contributions for a tax deduction.
Tax law says that companies can claim matched contributions for tax deductions. Depending on how many employees you have, that's a significant benefit that can help the organization's bottom line.
Better Employee Retention
Another big perk of 401K matching is how it changes the work culture and environment. Employees spend their entire lives trying to build their 401K. It's a monumental task, and many people choose jobs based entirely on how much they can save for retirement.
When you offer 401K matching, you're letting your employees know that you care about them and their financial future. It creates better work morale and even helps you retain employees for longer. Why would anyone want to leave if you offer generous contributions and good pay?
A Tool for Recruiting
Finally, 401K matching can do a lot to help you recruit the best employees for your company. It's just one of the details you'll handle through software for benefits management. But to a job-seeker, it's a big draw.
As mentioned earlier, many people choose jobs based solely on their ability to save for retirement. 401K matching is an impressive benefit that gives you a competitive advantage over your corporate rivals. Attract the best talent and keep them around for years to come.
Read a similar article about software for managing employees here at this page.