Gusto and your 401(k) audit: payroll, Gusto 401(k) and late deposits

Is Gusto your recordkeeper, or only your payroll?

Check which 401(k) your Gusto account connects to. Gusto 401(k) powered by Guideline is Gusto’s own plan, and Gusto says it continues to support other 401(k) partners, naming Betterment, Human Interest and Vestwell, plus providers connected through Pay(k)onnect.^[8] If Gusto 401(k) is your plan, the audit package, the Form 5500 audit task and where each report lives are covered on the Guideline 401(k) page. The rest of this page is about Gusto as payroll, which applies either way.

When does each 401(k) provider collect deferrals after a Gusto payroll?

That date is what late-deposit testing turns on, and Gusto’s help center gives a different answer for each integration:

Where Gusto states a timing, the plan provider debits your account rather than you sending the money. Either way, the deposit date the auditor tests is the date it posts to the plan, which comes from the provider’s records, not from Gusto’s.

How does that affect late-deposit testing?

Deferrals and loan repayments become plan assets on the earliest date they can reasonably be segregated from the employer’s general assets, and never later than the 15th business day of the following month.^[9] The seven business day safe harbor is limited to small plans, so a plan large enough to need an audit is generally held to the first test.^[9] “Within a few business days” is how an integration describes itself, not a standard the auditor applies; the auditor compares the date of each payroll with the date its deferrals posted and looks at any gap that is longer than your usual one.

On Gusto, the payrolls worth checking before the auditor does are the ones that break the pattern: a correction or off-cycle run, a payroll run before an employee’s enrollment or deduction change was processed (Gusto lists this as a cause of a missed deduction),^[2] and any deduction made up on a later payroll. Late deposits are reported on Schedule H line 4a, year after year until fully corrected, including lost earnings.^[10] For Gusto 401(k), Gusto Retirement lists late deposits among the situations for which it prepares Form 5330.^[7]

Which Gusto payroll records will the auditor ask for?

• The payroll register. Gusto’s own audit article lists having “your payroll register and other documentation ready to share” among the sponsor’s responsibilities.^[7]
• A payroll journal of 401(k) deductions and contributions. For the Human Interest integration, Gusto says to “run a payroll journal in your admin account” to see deductions and contributions.^[2] Run it for the full plan year; it is the list the auditor matches against the provider’s contribution records.
• Gusto’s SOC 1 report and bridge letter. Payroll is a service organization the auditor considers. Gusto offers SOC 1 and SOC 2 reports and bridge letters through its Security Trust Center at gusto.com/security, after you sign a non-disclosure agreement.^[6] The article does not say which services each report covers, so confirm the SOC 1 covers payroll.

Which Gusto payroll settings does the auditor check?

The auditor tests that the deferral taken from each paycheck matches the employee’s election and the plan’s definition of compensation. Three things on Gusto bear on that:

• Gusto says reimbursements are not eligible for 401(k) deductions.^[1] Check how the plan document treats every other pay type you use, such as bonuses and commissions, against how each is set up in Gusto.
• Gusto says that once an employee receives their pay, “you cannot change the deductions.”^[1] A missed deferral is fixed as a correction, not by editing the payroll, so keep a record of how each one was handled.
• With Pay(k)onnect providers, deferral changes made at the provider sync back to Gusto “within a week,”^[3][4] so a payroll run in that window can use the old rate.

If you are not sure when your plan first needs an audit, see how the count of 100 works.

What does Ledgerline audit?

401(k) and 403(b) plans, whichever payroll and platform the plan uses. We’re building an audit firm around those two plan types and booking engagements for the coming season, starting December 2026. How a Ledgerline audit works, or what a first auditor looks at.

Also on this site: Guideline and Gusto 401(k) audits, Human Interest 401(k) audits, and 401(k) audits by city and recordkeeper.

Frequently asked questions