Introduction

Gusto's research team set out to measure what a new federal retirement benefit will mean for the people who work at small businesses. Starting in 2027, the new Saver's Match will deposit federal dollars straight into the retirement account of a lower- or moderate-income worker who saves some of their own funds, starting with savings made in the 2027 tax year. It replaces the old Saver's Credit with a deposit rather than a non-refundable tax credit.

Using payroll records from hundreds of thousands of small-business employees, Gusto Insights estimated three things: how much expanding the benefit would raise workers' lifetime savings, how many small-business workers it reaches today, and what all of this means for the businesses that employ them.

Key Findings

• Doubling the income threshold for the full Saver’s Match will mean 3.5 million additional small business employees will benefit from eligibility. Extending the full 50% match to just $41k for single filers and $82k for those married filing jointly would add an estimated $107 billion in lifetime retirement savings, and bring as many as 3.5 million more small businesses' employees into the full benefit.

• As many as 9 million small business employees already qualify for the full savers match, with 11 million more in the partial phase-out range.

• A 401(k) would put 2.1 million more small businesses' teams within reach of this match.  Because the benefit rewards contributions to a retirement account, small businesses that offer a plan, especially one that enrolls workers automatically, are how their employees turn eligibility into deposited federal dollars.

Increasing full match eligibility to just $41K per year would mean 3.5 million new small business employees will benefit

The lever we studied is the income threshold below which a worker qualifies for the full match. The statute sets it low: a single filer gets the full match below about $20,500, with a partial match phasing to zero at $35,500. We modeled raising that full-match threshold, without changing how gradually the match shrinks as income rises, and summing the gains across the small-business workforce. The calculator above estimates the number of people, average additional savings, and average additional number of small business employees who will benefit from increasing the eligibility threshold for the full match.

The higher the threshold, the more workers clear it for the full 50% match. Doubling today's threshold would bring the full match to about 3.5 million more small-business workers and add roughly $107 billion in lifetime retirement savings; raising it to five times today's threshold reaches about 7.6 million more workers and $346 billion. 

In addition to increasing individual retirement savings, this policy is an efficient use of government dollars. Every added dollar of federal match compounds into roughly two dollars of retirement wealth by the time a worker retires, because the government's contribution grows in the market alongside the worker's own.

9 million small business employees currently qualify for the full Saver’s Match

Before any expansion, the Saver's Match reaches a wide slice of the small business workforce. Among private-sector employees at firms with fewer than 100 employees, weighted to the national population of about 42.4 million such workers, we estimate as many as 9 million have household incomes that qualify for the full 50% match, and 11 million more fall in the partial phase-out range.

These are employees like cashiers, line cooks, home-health aides, and the people who open the doors at small firms every morning, many of whom have never been offered an employer match. The match by filing status:

Consider a single parent earning $30,000 who files as head of household. She contributes $2,000 to an IRA, about 7% of her pay and the ceiling the match rewards, and the government adds $1,000. Left to grow at a 6% return over about 30 years, that one year's match is worth roughly $5,700 by the time she turns 65; if she qualifies and saves the full amount every year, the federal match alone builds to about $79,000. The reason this reaches her at all is the design change from the old Saver's Credit: the Credit was nonrefundable, so a worker who owed little tax often got nothing, while the Match is a deposit, so it lands regardless of tax liability.

Doubling the income threshold means 2.1 million more small businesses could see this match reach their teams by offering a 401(k)

Doubling the income threshold would bring employees at an additional 2.1 million small businesses within reach of the full match, a 28% increase over the current 7.4 million businesses with employees who currently qualify. While the mechanisms for accessing the match vary from a workplace plan to an IRA, the easiest way for small businesses to ensure that their employees take advantage of this program is through a workplace sponsored plan. This is especially true for plans that have automatic enrollments, which will turn eligibility for a match into an actual deposit for employees. 

That changes what a retirement plan is worth to a small business. Offering one is how a team reaches federal dollars they would otherwise leave unclaimed, and the match itself costs the employer nothing, since the government funds it. SECURE 2.0 also cut the cost of starting a plan. A business with 50 or fewer employees can claim a tax credit for 100% of its plan startup costs, up to $5,000 a year for three years, plus a separate credit of up to $1,000 per employee for the contributions it makes on workers' behalf (full for the first two years, then phasing down through year five). For a 20-person business, the startup-cost credit alone can offset up to $15,000 over three years.

The employer's role matters more because of one friction: the match is claimed on a tax form and is opt-in. The workers it is built for are the least likely to hear about a benefit that arrives that way. A workplace plan that already has them contributing can be the key that turns eligibility into a deposit.

Conclusion

The Saver's Match is a federal benefit built for the people small businesses employ, and it works best when those workers are already saving through a plan at work. That makes plan access the piece that determines how far the benefit reaches. Widening who qualifies would extend the Match to more low- and moderate-income workers and add measurably to their retirement security, while the SECURE 2.0 startup credit works the other side of the same problem, lowering the cost for a small employer to open a plan in the first place.

What gets workers into a plan is its own question, and much of the clearest movement has come from the states. Gusto's research on state auto-IRA programs finds they have driven the largest plan-adoption gains at the smallest firms, with the biggest enrollment increases among the lowest-income workers the Match is designed to reach; a national minimum coverage standard would point in the same direction. The arrival of the Match in 2027 sharpens why that access matters: it is how a worker turns eligibility into dollars the federal government is ready to put toward their retirement.

Methodology

The figures come from Gusto payroll records for 2019 through 2026 (2026 annualized), covering private-sector employees at firms with fewer than 100 employees, weighted to the national universe of roughly 42.4 million such workers using the Current Population Survey and the QCEW.

• Household income. For married filers we add an imputed spouse income (median second earner by income and age from the CPS), since payroll shows one paycheck, not the household's.

• Savings projection. We project each worker's match forward to age 65 at a market return, in 2025 dollars, and report the additional savings it produces.

• Take-up. We assume a small share (3%) of currently-eligible non-participants begin saving because of the Match. This is new participation; some is money shifted from other accounts rather than new national saving, so we treat it conservatively.

• Weighting. Worker counts are weighted to the national small-business workforce (raked to the CPS via QCEW). Business counts are weighted to national establishment totals by industry and firm size using QCEW establishment counts (a company weight = national establishments ÷ Gusto companies in each industry-by-size cell), so the business figures are national estimates, not a Gusto-customer tally.

• Income is observed, not complete (counts are an upper bound). We see a worker's Gusto wages and, for married filers, an imputed spouse income, but not income from a second job or a non-Gusto employer. A worker with outside income could have modified AGI above the threshold, so our eligibility and reach figures read as a ceiling on who qualifies.

What a federal dollar buys. With contributions held fixed, the added retirement wealth is the government's match compounding forward, so the benefit-cost ratio sits near 2-to-1, an accounting identity rather than a behavioral return.