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Employer contribution cost model

Open enrollment is the window where this gets decided. Model what a Trump Account contribution would actually cost at your headcount and participation rate — and see which questions belong to benefits counsel rather than to a spreadsheet.

The rules this model applies

Editable, so the model stays correct as the rules settle.

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The employer amount counts inside the combined cap, not on top of it. That matters less for your budget than for what your employees will ask you — see the communication line item below.

Your workforce

Estimates are fine. Nothing here leaves your browser.

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$0 Estimated annual contribution cost
0 Employees expected to participate
$0 Cost per benefits-eligible employee

Participation sensitivity

Take-up is the number nobody can predict, so it is the number worth bracketing rather than guessing. Your entered rate is highlighted.

Take-upParticipantsAnnual cost

The line item most employers forget

What belongs to benefits counsel, not to this model

This model does arithmetic on your numbers. It cannot answer any of the following, and neither can any other web page — these depend on your plan documents, your workforce composition, and rules that are still being written. Take this list to your benefits counsel:

  1. Nondiscrimination. Whether the design creates a testing issue given who in your workforce actually has eligible children. Rules here are proposed, not final.
  2. Plan characterization. Whether the arrangement sits inside an existing plan or stands alone, and what that means for your documents and filings.
  3. ERISA status for your arrangement. General guidance exists. General guidance is not a determination about your plan, and it can evolve.
  4. Payroll and reporting mechanics. How the amount flows, what gets reported, on which form, by whom.
  5. Interaction with your existing benefits and any cafeteria-plan treatment.
  6. Multi-state workforce. State treatment varies and is unsettled.
  7. What you commit to if the rules change mid-year — the one nobody asks until it happens.

The question this raises

The budget number is the easy part. The parts that actually determine whether this lands well:

    What this model does not do

    • It does not model payroll taxes or your specific tax treatment.
    • It does not model state treatment. It varies and is unsettled.
    • It is not a compliance review and it is not benefits, tax, or legal advice.
    • It does not know your plan documents, your workforce composition, or your carrier arrangements.
    • Its take-up figure is your estimate, not a benchmark. We do not have credible take-up data for a program this new, and we are not going to invent one.

    If a number matters to your decision and isn't in this model, assume the model doesn't handle it.

    Sources

    Each default is linked to the primary source it comes from, with that source's date. Two of the four are proposed rules and are labelled as such.

    • $2,500 per employee per year, excludable from the employee's income under §128, indexed only after 2027 — REG-101355-26, Federal Register 11 August 2026. Proposed. Comments close 25 September 2026.
    • Nondiscrimination rules — same document, same status. Proposed.
    • Generally not “employee pension benefit plans” under ERISA §3(2), where participation is voluntary, the employer does not control investments, does not endorse, and receives no compensation beyond reasonable fees — DOL Technical Release 2026-02, 17 June 2026.
    • $5,000 combined annual cap per child, indexed after 2027; the $1,000 federal deposit sits on top of it — IRS Notice 2025-68 and IRS, Trump Accounts.
    • What accounts may be invested in — proposed regulations, eligible investments, 21 August 2026, comments close 20 October 2026. Proposed.

    The Sovereign Academy is not affiliated with or endorsed by the U.S. government, the Treasury, the IRS, or the Trump Accounts program.
    General education for benefits decision-makers. Not benefits, tax, legal, or compliance advice. Employer rules for this program are proposed and not final. Nothing entered here is stored or transmitted.