Payroll FAQ: SECURE 2.0 Act
What are the most frequently asked questions about the SECURE 2.0 Act?
Table Of Contents
- Summary
- Who is this for
- Before you start
- FAQs
- Related Articles
Summary
The SECURE 2.0 Act (Setting Every Community Up for Retirement Enhancement) is new federal legislation designed to help Americans save more effectively for retirement. Several provisions will impact employers, payroll processes, and benefit plan administration over the next few years. This guide explains what changes are coming, what BambooHR Payroll currently supports, and how BambooHR is preparing for the upcoming 2026 updates.
This guide is for:
- Payroll administrators using BambooHR Payroll
- HR and benefits administrators who manage 401(k) or other retirement plan contributions
- Finance teams responsible for compliance and reporting under SECURE 2.0
Applies to U.S. customers using BambooHR Payroll.
Before reviewing or adjusting retirement contribution settings:
- Confirm your company's retirement plan provider (such as Charles Schwab or other vendors).
- Verify employee FICA wage totals for the previous year using the Complete Summary Report.
- Make sure your retirement plan setup supports both pre-tax and Roth contributions.
- Review your plans compliance calendar for contribution changes starting January 1, 2026.
FAQs
The SECURE 2.0 Act expands retirement savings options and improves retirement security for Americans. It introduces new contribution rules, optional student loan provisions, and enhanced catch-up opportunities for older workers.
Some provisions are already in effect, while others begin in 2025, 2026, or later.
Beginning January 1, 2026, employees aged 50 or older who earned more than $145,000 in the previous year must make all catch-up contributions to a Roth account (after-tax).
How BambooHR is preparing:
- The system automatically validates employee age and FICA wages to determine Roth eligibility.
- BambooHR Payroll will provide a report identifying employees with FICA wages over $145,000.
- A validation step within Run Payroll will alert Payroll Admins when the pre-tax limit has been reached.
- BambooHR Payroll will not automatically enroll employees in Roth catch-ups. Employees must opt in once the Roth plan is configured.
- Product teams are exploring data feeds to retirement providers (such as Charles Schwab) that include indicators for employees required to make Roth contributions.
Individuals aged 60 to 63 can make larger, inflation-adjusted catch-up contributions beginning in 2025.
- BambooHR Payroll currently supports this; the calculation happens automatically when running payroll.
Starting in 2026, employers can treat student loan payments as elective deferrals, allowing employees to receive matching retirement contributions for qualifying student loan payments.
- BambooHR Payroll does not currently support this.
Interested in this feature? Submit a request via the BambooHR Product Feedback form.
To prepare for the SECURE 2.0 changes:
- Review your company's 401(k) or retirement plan setup.
- Begin tracking which employees exceed $145,000 in FICA wages.
- Ensure your plan provider supports Roth catch-up contributions.
- Encourage employees nearing age 50 to confirm their contribution elections.
- Add your organization to the Secure 2.0 Compliance Tracker if you have compliance concerns or questions.
Beginning January 1, 2026, BambooHR® Payroll will support the Roth Catch-Up contribution requirements outlined in the SECURE 2.0 Act.
Our Product team is finalizing the implementation details to ensure compliance with the new rule. The current plan includes:
- A report identifying employees who earned more than $145,000 in FICA wages during the previous year (based on continuous employment with the same employer).
- A notification system to alert administrators when employees approach the $145,000 threshold, prompting verification that additional catch-up contributions are designated as Roth.
This process will not be fully automated. Payroll administrators will use the provided report and notifications to confirm that catch-up contributions for employees aged 50 or older who exceed the wage threshold are correctly designated as Roth contributions.
BambooHR fully commits to helping you prepare for these changes. Our Payroll team is:
- Testing pre-tax to Roth contribution transitions.
- Reviewing W-2 reporting logic.
- Coordinating with benefit providers for Roth designation feeds.
- Ensuring all new settings comply with IRS guidance.
As we finalize each feature, we will update this guide and communicate changes through our product release notes.
| Role | What to Know | Actions |
|---|---|---|
| Payroll Admins | Validate FICA wages, monitor contributions limits | Configure and monitor Roth catch-up eligibility |
| HR Admins | Ensure plan setup supports Roth contributions | Communicate plan changes to affected employees |
| Employees | Choose Roth contribution participation | Confirm retirement elections once plan setup is complete |
| Symptom | Cause | Fix |
|---|---|---|
| Catch-up contributions not appearing | Employee not yet age 50 or not marked eligible | Verify birthdate and plan eligibility |
| Payroll error message during validation | Missing Roth plan setup | Create a Roth plan in your benefits setup before enabling catch-up |
| Incorrect FICA wage total | Prior-year data not imported | Enter prior-year FICA totals in the new UI field (available in 2026) |
If you encounter issues with retirement plan setup or need support validating employee eligibility:
- Contact BambooHR Payroll Support through your in-app "?" icon. Choose the Chat With Us or Submit a Support Request option.