Employee census

What an employee census is

A census has one row for each person employed during the year. Typical fields are name, Social Security number, dates of birth, hire, termination and rehire, hours worked, gross pay and plan compensation, deferrals and employer contributions, ownership percentage, officer status and family relationships to owners. It should cover every company in the controlled group.

Why it matters to employers

Testing is only as accurate as the census. A wrong hire date changes who is eligible. A missing ownership or family field changes who counts as a highly compensated or key employee, which changes test results. The year-end census also sets the clock: refunds from a failed ADP test are due within 2½ months after the plan year ends to avoid an excise tax. A payroll integration can supply most fields, but ownership and family information has to come from you.

Example

An owner’s adult daughter works at the company and earns $50,000. The census leaves out the family relationship. Under the attribution rules she is treated as owning her parent’s shares, which makes her a highly compensated employee. Leaving that out distorts the ADP test.

Common mistakes

• Listing only employees who participate.

• Leaving off people who were terminated during the year.

• Leaving ownership and family columns blank.

• Reporting pay that does not match the plan’s definition of compensation.