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50% 401k and 50% Catch up on Bonus Payments

Hi SAP experts,

Need you advise on this.

We recently processed a bonus payment. EE elected his bonus to have 50% 401k and 50% Catch-up. So, seeing it initially, we are expecting that all of his earning will go towards 401k contribution less the required FICA taxes withheld. However, this did not happen since he was also deducted with Fed,State taxes on that bonus paycheck and the remaining catch-up amount (after deducting Fed,State &FICA) went to DDNTK.

So..is there a rule in SAP that limits all earnings going to 401k/Catch-up? There is no question with FICA taxes being there but I wanted to know why there were also Fed and State taxes when there shouldn't be since 401k and Catch-up are Fed/State non-taxable right?. Any help would be appreciated. Thank you!

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