Actual Deferred Percentage (ADP)

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What is Actual Deferral Percentage (ADP)?

 

Actual deferral percentage or ADP is the percentage of compensation that has been deferred by an employee for a plan such as 401(k). This is made possible through a salary deduction arrangement made between an employee with their employer. Each employee’s ADP is reviewed to find out if the arrangement passes the standards and requirements of the IRS.

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