How Long Does It Take for a 401k Direct Deposit?

Many Americans lose a portion of their paychecks to 401(k) contributions every pay cycle. But how long does that slice of money take to get into your 401(k) account? What is the best amount to put in, and are there any consequences to your employer delaying your deposit? 

How long does it take for a 401(k) contribution direct deposit? It can take up to two weeks for a 401(k) contribution direct deposit to be processed. Most employers send the contributions directly to the plan administrator, who then credits the account.

However, there are some cases where the employer sends the contributions to the employee, who then deposits them into the account.

Your employer should deposit a portion of your paycheck into your 401(k) as soon as possible. The maximum amount of time your employer has to do this is 15 business days. You have minimal control over your 401(k) contribution, but your employer will suffer if they exceed that deadline. 

401(k) Contributions

Many employees are asked how much they want to put into their 401(k) at least once a year. This is usually a percentage of their paycheck. For example, if an employee gets paid $100 per week, 15% of that, or $15, could go into their 401(k). 

But this is usually all employees can do when deciding things for their 401(k). The account and deposit time are decided by their employer. 

Party Controls 
Employee Whether they deposit into a 401(k). How much of their paycheck is deposited.
Employer The type of 401(k) accounts you have. Depositing a percentage of your paycheck into your 401(k). 

How Much of my Paycheck Should Go Into My 401(k)? 

The usual advice involving your 401(k) is “match it.” But what does this mean? 

When you set up a 401(k) plan at your company, your employer will often contribute a little bit to your retirement fund; think of it as a bonus to your paycheck to be used down the line. 

The most common types of matching are:

  • Dollar-for-dollar—the employer will match your contribution exactly. 
  • Partial matching—Most employers will add up to .50 per dollar to your 401(k). 

If your employer offers any form of matching, it is best for you, as the employee, to select the percentage of your paycheck that will match their contribution. For example, if your employer will only offer 50% of what you put in, up to 6% of your salary, it does not benefit you to contribute more than 6%. 

There are IRS limits on the total amount of 401(k) contributions from employers and employees. These change yearly; the limit to employee contributions was $20,500 in 2022. 

What Are the Differences Between a 401(k) and an IRA? 

While looking up information about your 401(k), you may have come across something called an Individual Retirement Arrangement (IRA).

The main difference between a 401(k) and an IRA is that a 401(k) is offered through an employer, while an IRA can be opened through a bank or other financial institution.

This is a separate type of retirement account that has fewer taxes on it and more control over the plan as a whole. 

There are two types of IRAs: a regular IRA and a Roth IRA. The main difference between them is when you get a tax break. If you are considering a type of retirement plan aside from a 401(k), the following table may help: 

401(k)IRA Roth IRA 
Contribution Limit $20,500 (2022); $27,000 if you’re 50+ years old $6,000 (2022); $7,000 if you’re 50+ years old Same as IRA. 
Pros Employer match. High contribution limit. Not limited by income. Funds are less expensive than elsewhere. Wide range of investmentsContributions reduce taxable income in the same year they are made, if possible. Tax-free withdrawals in retirement. No minimum distributions while retired. 
Cons No control over the plan. Limited investment options. Distributions are taxed just like everything else. Required minimum distributions at age 72. Lower contributions than 401(k). If your spouse is covered, your deduction may be phased out. Distributions are taxed as ordinary income. Required minimum distributions at age 72. Lower contributions than 401(k). No tax benefit in higher brackets. No ability to contribute in higher brackets. 

That’s a lot, and you may be wondering which kind of account is “better.” If your employer lets you match your contributions, you should probably stick with a 401(k). 

And if you can feed a 401(k) and an IRA, go for it! Which IRA is better for you will depend on your tax bracket, so bear that in mind. 

What Happens to My Employer if They Miss a 401(k) Payment? 

As stated above, after you have selected how much you want to deposit into your 401(k), you have very little power over it. But your employer can face consequences if they fail to deposit your contributions into a 401(k) account within 15 business days. What happens and why? 

The United States Department of Labor (DoL)’s Employee Benefits Security Administration is in charge of enforcing your 401(k) payment. Most retirement plans fall under ERISA—the Employee Retirement Income Security Act. Under ERISA, your employer withholding your 401(k) is considered a prohibited transaction. 

But what does this mean for your employer? At the very least, they will need to pay an excise tax for their crime. This will be approximately 10–15% of their withheld funds. There may be further consequences if they continue to hold your money.

This tax will also affect your earnings, and any accounts under your employer may lose interest. If you suspect that your employer is withholding your 401(k), contact HR or whoever is in charge of your paycheck. After all, that paycheck might be on the line! 


As an employee, most aspects of your 401(k) are out of your control. You get to decide whether to deposit money into your 401(k) or not and how much your contribution will be. After your decision, your employer has 15 business days to get that money into your 401(k). 

If your employer does not deposit your money into your 401(k), they may face consequences. The most common penalty is an excise tax, but this may have ramifications for employee accounts. Contact HR if you think funds are being withheld—that’s your future on the line!

Frequently Asked Questions(FAQ)

How long does it take for a 401k payment to post?

A 401k payment typically takes between 1-3 business days to post. This timeframe is dependent on the custodian of the 401k plan, the payment method used, and the time of day the payment is initiated. Generally, payments initiated before the close of business will post the following business day, while payments initiated after the close of business may take up to three business days to post.

How long does it take to transfer money from 401k to bank account?

Transferring money from a 401k to a bank account typically takes between three to five business days. The exact amount of time depends on the type of 401k plan, the financial institution involved, and the type of bank account. In some cases, the transfer may take longer due to additional paperwork or other factors.

How do I track my 401k deposit?

Tracking a 401k deposit involves checking with the plan administrator to ensure that the funds have been properly credited to the account. Additionally, it is important to review statements and records to ensure that the deposits have been properly reported and credited. Finally, it is important to regularly monitor the account to ensure that the deposits are being properly managed and invested.
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