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The 7-Day Safe Harbor Rule: What Small Employers Need to Know About 401(k) Deposit Deadlines
ARTICLE | May 26, 2026
Authored by Vasquez + Company
If your business offers a 401(k) plan, understanding the rules around depositing employee contributions is more important than you might think. The U.S. Department of Labor requires that withheld amounts be transmitted to the plan on the earliest reasonable date possible, and failing to do so can trigger prohibited transaction violations and costly penalties. To help small employers navigate this compliance challenge, the DOL established a seven-day safe harbor rule that provides a defined and reliable timeframe for making deposits. Whether you manage payroll in-house or work with a third-party provider, knowing how this rule works, when it applies, and how it interacts with the general deposit requirements can save your business from serious risk.
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