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A ‘tiered’ company match is a structure where an employer matches employee retirement contributions at different rates across “tiers” of employee deferrals. Instead of one flat match rate, the match changes once the employee’s contribution crosses certain percentage thresholds. Example
“100% of the first 3% and 50% of the next 2% of the employee’s contributions.”
This means:
  • On the first 3% of pay the employee contributes, the employer matches 100% (dollar-for-dollar).
  • On the next 2% of pay the employee contributes, the employer matches 50% (50 cents on the dollar)

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Tiered Matching Examples

Tiered matching is common in retirement plans like 401(k), 403(b), and similar plans. Some examples of tiered match include:
  • Traditional Safe Harbor, Basic Match:
    • 100% of the first 3% of compensation deferred, plus 50% of the next 2%
  • Traditional Safe Harbor, Enhanced Match
    • 100% of the first 4% of compensation (4% max)
    • 100% of the first 5% of compensation (5% max)
    • 100% of the first 6% of compensation (6% max)
  • QACA Safe Harbor, Basic Match
    • 100% of the first 1% of compensation deferred, plus 50% of the next 5%
  • QACA Safe Harbor – Enhanced Match
    • 100% of the first 3.5% of compensation (3.5% max)
    • 100% of the first 4% of compensation (4% max)
    • 200% of the first 2% of compensation (4% max)

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Finch Integrations that Support Tiered Matching

Find the list of providers that support percent, fixed, and tiered employer matching here. You can also visit our Field Support page and follow these steps:
  1. From the dropdown, select “Field Support for Deductions.”
  2. Go to the “Supported Features for Deductions” tab.
  3. Under “Benefit Feature,” select all applicable options:
    • company_contribution:percent
    • company_contribution:fixed
    • company_contribution:tiered

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How to Convert a Tiered Match Into a Single Match Percentage

Some payroll systems only support employer contributions as a single percentage of gross compensation (e.g., “x% of gross comp”), not as a tiered match based on employee contributions. If Finch support percentage contributions for a provider, you can convert the tiered match into a single % number to achieve the same outcome. This section explains how to calculate that single percentage per employee, for each payroll, when your plan formula is:
100% of the first 3% of compensation deferred, and 50% of the next 2%

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Step 1: Find the employee’s contribution rate (R)

Get the employee’s contribution rate (R). Note that this “conversion” works reliably for %-based employee contributions only.

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Step 2: Convert R into a single employer % of gross comp

For this match formula (100% of first 3%, 50% of next 2%), the employer contribution as a single % of gross compensation can be found following the calculations below: Let R = employee contribution rate (%):
  • If R ≤ 0% → Employer % = 0%
  • If 0% < R ≤ 3% → Employer % = R
  • If 3% < R ≤ 5% → Employer % = 3% + 0.5 × (R − 3%)
  • If R > 5% → Employer % = 4% (the maximum match)

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Examples

Using the same formula (100% of first 3% and 50% of the next 2%):
  • Employee defers 2% of pay
    • Falls in the 0–3% range
    • Employer % = R = 2% of gross comp
  • Employee defers 4% of pay
    • Falls in the 3–5% range
    • Employer % = 3% + 0.5 × (4% − 3%)
    • Employer % = 3% + 0.5% = 3.5% of gross comp
  • Employee defers 6% of pay
    • Above 5%, match is capped
    • Employer % = 4% of gross comp
This approach gives you a single, per-employee employer contribution rate that correctly reflects the tiered match formula for each payroll period.