If your employer is not depositing your SIMPLE IRA contributions after withholding them from your paycheck, that money is legally plan assets the moment it leaves your check, and your employer is almost certainly past a federal deposit deadline. Document the gap, put your employer on notice in writing, and if the deposits don’t appear within days, file complaints with the Department of Labor’s Employee Benefits Security Administration and the IRS. Both agencies enforce this with excise taxes and personal liability for lost earnings.
The Deadline Your Employer Has Already Missed
Two deadlines apply, and the shorter one almost always controls. The IRS gives employers until 30 days after the end of the month the money was withheld. The Department of Labor imposes a stricter rule: the earliest date your contributions can reasonably be separated from the company’s general funds.1Internal Revenue Service. SIMPLE IRA Plan Fix-It Guide – You Didn’t Deposit Employee Elective Deferrals Timely
For most small employers, the DOL treats the seventh business day after payday as a safe harbor. If your employer normally clears payroll within two or three days, waiting until day seven may not hold up either. Any plan that covers rank-and-file employees, not just the owner and spouse, has to meet the DOL timeline.1Internal Revenue Service. SIMPLE IRA Plan Fix-It Guide – You Didn’t Deposit Employee Elective Deferrals Timely
Employer matching or nonelective contributions are on a different clock. Those must be in your account by the due date of the employer’s federal income tax return, including extensions, which is typically April 15 or as late as October 15 of the following year for a calendar-year business.2Internal Revenue Service. Retirement Plans FAQs Regarding SIMPLE IRA Plans So if what’s missing is the employer’s match rather than your own withheld deferrals, the timing analysis is different and the employer may not yet be late.
Confirm the Money Is Actually Missing
Line up your pay stubs against your SIMPLE IRA account statements or the custodian’s online portal. Each stub should show the amount withheld for retirement that pay period, and a matching deposit should appear in your IRA within roughly a week. If the deductions show on your stubs but nothing corresponding lands in the account, the contributions are late or gone.
Take screenshots or download statements now, before anything changes. You want the record fixed in time.
Put Your Employer on Notice in Writing
Start internally. Send an email or a letter to whoever handles payroll or benefits, and be specific: list each affected pay period, the exact amount withheld on each stub, and the fact that no matching deposit appears in your IRA account. A written notice creates a timestamp regulators will look for later.
Save every reply. If a fix date is promised, note it. If a phone conversation happens, follow up in writing to confirm what was said. The paper trail is what makes any later complaint move quickly.
Give your employer days to respond, not weeks. The money was already legally past due before you noticed. If the deposits don’t appear promptly after you raise the issue, escalate.
File a Complaint With EBSA and the IRS
Two federal agencies handle different pieces of this. You can contact both.
Department of Labor (EBSA)
EBSA investigates fiduciary breaches, which is what a late or missing deposit of your own withheld money is. EBSA’s benefits advisors can explain your rights and help recover what you’re owed.3U.S. Department of Labor. Ask EBSA Call 1-866-444-3272 or file through the online intake portal.4U.S. Department of Labor – Employee Benefits Security Administration. Request Assistance from a Benefits Advisor
Include the specific dates of each affected paycheck, the amounts withheld, copies of the stubs and account statements, and any written back-and-forth with your employer. Concrete detail speeds up the investigation.
Internal Revenue Service
The IRS’s Tax Exempt and Government Entities division handles retirement plan compliance. Reporting to the IRS matters especially when employer matching or nonelective contributions are also missing, since those raise separate tax consequences. The IRS can assess excise taxes and push the employer into a formal correction program.
What Your Employer Is Facing
Knowing the exposure on your employer’s side helps explain why most employers move quickly once they understand the problem.
When your employer withholds retirement money and doesn’t deposit it on time, that’s a prohibited transaction under federal tax law. The IRS imposes a 15% excise tax on the amount involved for every year the transaction remains uncorrected, and if it’s still not fixed, an additional 100% tax applies.5Internal Revenue Service. Retirement Topics – Tax on Prohibited Transactions The employer reports and pays this tax on IRS Form 5330.6Internal Revenue Service. Form 5330 Corner
Your employer also has to restore any investment earnings your account missed while the money sat in company hands. That means depositing the principal and the earnings it would have generated if invested on time. The DOL publishes an online calculator that uses the IRS underpayment interest rate to produce the exact figure.7U.S. Department of Labor. Voluntary Fiduciary Correction Program Online Calculator
When the failure is willful rather than a bookkeeping slip, criminal penalties are on the table. Federal law provides fines up to $100,000 and imprisonment up to 10 years for individuals who willfully violate ERISA, and fines up to $500,000 for a corporate employer.8Office of the Law Revision Counsel. 29 U.S. Code 1131 – Criminal Penalties Prosecution is rare for ordinary late deposits, but an employer who systematically pockets employee withholdings sits in a different category.
The Correction Programs Your Employer Can Use
Federal agencies run correction programs designed for exactly this situation, and employers who use them voluntarily fare better than those who wait for an investigation. It’s worth knowing they exist so you can point your employer to them.
The DOL’s Voluntary Fiduciary Correction Program lets an employer self-report the late contributions, deposit the missing money plus lost earnings, and receive conditional relief from excise taxes through a related prohibited transaction exemption. As of 2025, the DOL added a streamlined self-correction option for smaller lapses (lost earnings of $1,000 or less, deposited within 180 days of the original withholding date), which lets the employer skip the full application and simply file a notice with EBSA.9U.S. Department of Labor. Fact Sheet – Voluntary Fiduciary Correction Program If your situation is recent and modest in size, that route makes fixing it relatively painless.
The IRS runs a parallel framework called the Employee Plans Compliance Resolution System, or EPCRS. It offers self-correction, voluntary correction with IRS approval, and correction during an audit under a closing agreement.10Internal Revenue Service. Employee Plans Compliance Resolution System Overview EPCRS addresses plan qualification; the DOL’s VFCP addresses the fiduciary breach. A significant failure may need both.
Your Employer Cannot Retaliate for Reporting
ERISA Section 510 makes it unlawful for anyone to discharge, fine, suspend, or discriminate against a plan participant for exercising any right under the plan or under ERISA, or for providing information in any related inquiry.11Office of the Law Revision Counsel. 29 U.S. Code 1140 – Interference With Protected Rights That covers both your internal complaint to your employer and any formal complaint to the DOL or IRS. If retaliation happens, it’s a separate federal violation, enforceable through the courts under ERISA’s civil enforcement provisions.
If Your Employer Is Financially Struggling
A bankruptcy filing doesn’t erase your claim to withheld contributions. ERISA requires retirement funds to be kept separate from business assets, so in principle they’re beyond the reach of the company’s creditors.12U.S. Department of Labor, Employee Benefits Security Administration. Your Employer’s Bankruptcy – How Will It Affect Your Employee Benefits? The problem is what you’re already dealing with: if the money was never transferred out, it’s still in the employer’s general accounts and exposed to creditors.
Federal bankruptcy law gives unpaid employee benefit plan contributions fifth priority among unsecured claims, capped at $17,150 per employee (as adjusted effective April 2025) and covering contributions arising from services within 180 days before the filing.13Office of the Law Revision Counsel. 11 U.S. Code 507 – Priorities That puts you behind secured creditors and certain wage and administrative claims, but ahead of general unsecured creditors. If your employer looks financially shaky and contributions aren’t appearing, act now. Waiting until a filing makes the money much harder to recover.