How does an employer benefit from a 401(k) matching plan?

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There are a few benefits for the employer who match on a 401(K) plan.  

 

-For smaller businesses 401(K) matching may allow them to contribute more themselves.  Lowering their personal tax bill.

-A 401(K) match is a employee benefit that many people have come to expect or at least look for when searching for a job.  So potentially the match can help attract better talent.   Also you normally have to be at a job for a certain amount of time to get the full match- so this also help retain top employees.

 

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