How much does a 401(k) cost for an Oregon small business?
Transparent pricing is rare in this industry. Here's what you'll actually pay — and how tax credits can offset most of it.
The short answer
For most Oregon small businesses (5–50 employees), a professionally administered 401(k) plan costs between $2,000 and $6,000 per year in administration fees. That's roughly $125–$500 per month depending on your headcount, your plan's complexity, and which provider you choose.
But that number alone is misleading — because SECURE Act 2.0 tax credits can cover most or all of it in the first three years. More on that below.
The four types of 401(k) fees
When comparing providers, you'll encounter four categories of costs. Some providers bundle them together; others itemize. Knowing what to look for is half the battle.
| Fee type | What it covers | Typical range |
|---|---|---|
| Setup fee | Plan documents, IRS filing, initial configuration, onboarding | $0–$1,000 (one-time) |
| Administration fee | Annual compliance testing, Form 5500, plan amendments, participant notices, contribution calculations | $1,200–$3,000/year base + $25–$75 per participant |
| Recordkeeping fee | Account maintenance, transaction processing, statements, online portal | $0–$60 per participant/year (sometimes bundled into admin) |
| Investment/asset fee | Fund management and platform charges, deducted from participant balances | 0.03%–0.80% of plan assets annually |
Watch out for asset-based administration fees. Some providers charge a percentage of total plan assets instead of a flat fee. On a $1M plan, a 0.50% asset fee is $5,000/year — and it grows as your plan grows. Flat-fee models are more predictable and typically cheaper for growing plans.
What Oregon providers actually charge
Here's how pricing breaks down across the types of 401(k) providers available to Oregon businesses. Note: pricing changes frequently, so these are approximate as of early 2026.
| Provider type | Typical cost (25 employees) | Fee model |
|---|---|---|
| National online platforms | $1,800–$3,600/year | Low base + per-participant + asset-based fees on balances |
| Payroll-bundled plans | $2,000–$5,000/year | Often bundled into payroll pricing; limited plan design flexibility |
| Traditional TPA + advisor | $3,000–$8,000/year | Separate TPA fee + advisor fee + fund expenses; most customizable |
| Independent Retirement | $2,250/year | Flat fee: tiered by participant count. Starter starts at $1,750/year (first 10 included). No asset-based billing to employers. |
The online platforms (Guideline, Human Interest, Vestwell) look inexpensive on paper, but most charge asset-based fees that increase as your employees save more. A plan with $500K in assets might pay $2,500–$4,000/year in asset fees alone — on top of the base and per-participant charges.
With a flat-fee TPA like Independent Retirement, your cost is the same whether your plan holds $100K or $5M in assets.
A real example: 15-person Oregon business
Let's say you run a 15-employee professional services firm in Portland. Here's what a 401(k) would cost with Independent Retirement:
Starter
$2,250/year
$2,250/year ($188/month)
$150/year ($12.50/month)
That's less than $12 per employee per month for full plan administration — including an assigned client success manager, compliance testing, Form 5500, participant notices, and contribution calculations.
How SECURE 2.0 tax credits change the math
The SECURE Act 2.0 made starting a 401(k) dramatically cheaper through three stackable tax credits:
| Credit | Amount | Duration |
|---|---|---|
| Startup credit | Up to $5,000/year (100% of admin costs for ≤50 employees) | 3 years |
| Employer contribution credit | Up to $1,000 per non-HCE employee | 5 years (100% yr 1–2, phasing down) |
| Auto-enrollment credit | $500/year | 3 years |
For our 15-person Portland example, the startup credit alone ($2,025) would fully cover the annual administration cost for the first three years. Add auto-enrollment and the employer contribution credit, and most Oregon small businesses come out well ahead — the tax credits exceed the plan costs.
Net cost in Year 1 for a 15-person plan: $2,025 admin cost minus $2,025 startup credit minus $500 auto-enrollment credit = −$500 (net gain). The plan literally pays for itself and then some.
Hidden costs to ask about
When comparing providers, ask these questions. The answers will reveal costs that don't show up on the pricing page:
Are your admin fees flat or asset-based? If asset-based, what happens when total plan assets reach $1M? $5M? Some providers' fees double or triple as plan assets grow.
What's included in the base fee? Compliance testing, Form 5500, and plan amendments should be included — not billed separately. If a provider charges extra for these, the headline price is misleading.
Who handles IRS and DOL audits? If your plan gets audited, will your provider support you? Some charge $200–$500/hour for audit assistance. At Independent Retirement, audit support is included in our Pro and Premier tiers.
Is there a termination fee? Some providers charge $500–$2,000 to close or transfer a plan. Ask upfront.
What are the participant-level fund expenses? Even if the admin fee is low, participants may be paying 0.50%–0.80% in fund expense ratios. Index funds typically run 0.03%–0.10%.
OregonSaves is free — why not just use that?
OregonSaves costs the employer nothing, which makes it attractive. But "free" comes with real limitations: no employer matching, a $7,500/year contribution cap (vs. $24,500 for a 401(k)), Roth-only contributions, income limits that exclude higher earners, and limited investment options.
For most businesses over 5 employees, a 401(k) is a better recruiting tool, a better tax strategy, and — with SECURE 2.0 credits — often cheaper than expected.
Read our full OregonSaves vs. 401(k) comparison →
The real question isn't "how much does it cost?"
It's "how much does it cost after tax credits?" For most Oregon small businesses, the answer is close to zero for the first three years.