We own small business (C-Corp without S-election) that currently does not have employees outside the owners (three of us). The business is producing a nice amount of revenue and as of yet none of us have drawn any salary.
We'd like to set up a 401k plan for the business and maximize our contributions. Reading up on the subject, the individual contribution limit for 2016 is $18,000 and the total of individual + employer match is $53,000.
What's the minimum salary we need to pay ourselves and overall structure to enable that maximum $53,000 value per person?
Can we pay ourselves a $18,000 salary with 100% personal contribution to the 401k as well as a $35,000 employer contribution for a total of $53,000? Or do we need to pay ourselves a higher salary to allow for the maximum?
To clarify further, we're trying to figure out the minimum we have to pay out in salary and employer match to maximize the $53,000 total per person limit. We're not sure if the outline in the previous paragraph ($18K salary all going to 401k as individual component and $35K employer contribution) is allowed and, if not, what's the minimum outlay from the company that would be allowed?