Icon is a payroll-deduct IRA. This means all employee contributions flow securely through your payroll bank account before being transferred to Icon for investing in employees' IRAs.
Setting Up the Bank Connection
Every employer must link the bank account they use to run payroll with Icon through their admin dashboard. This connection matters because it is the account that contributions are pulled from each pay period. Linking this account ensures contributions flow securely and consistently.
Think of this as establishing the "pipeline" for money movement. Without a linked payroll bank account, there's no way for employee contributions to transfer into their IRAs.
How Contributions Move Each Pay Period
Here's what happens once everything is set up:
Payroll runs. Say an employee, John, elects to contribute $50 per paycheck. When payroll is processed, John’s $50 is withheld from their post-tax net pay and remains in the employer's payroll bank account.
Employer approves contributions in Icon. In the Icon dashboard, the employer sees all employee contribution amounts for that pay period. Once approved, the total—for example, $1,200 across all employees—is queued for transfer. This step is automated for our integrated plans.
Funds are pulled. Icon pulls the $1,200 in one transaction from the employer's payroll bank account.
Individual allocations. Icon then allocates $50 to John’s IRA, along with the contributions for each participating employee.
At the end of this process, the employer's payroll bank account nets out evenly; the same dollars withheld from employee paychecks are the dollars transferred to Icon.
Employers don't fund contributions themselves, employees do. The employer's role is to create the connection points (bank link, payroll deduction, approval) so Icon can securely move money from each paycheck into employees' retirement accounts.