How Much Does a 401(k) Audit Cost in 2026?

If you are searching for "how much does a 401(k) audit cost," you have probably already noticed that most audit firms will not tell you. They want you to call, schedule a meeting, and wait weeks for a proposal. We think that is backwards. Here is what 401(k) audits actually cost in 2026 -- and what drives the price up or down.

Whether you are an HR director preparing your first audit or a CFO comparing proposals for the fifth year in a row, this guide will give you the real numbers, the factors that move them, and a few things to watch out for when evaluating firms.

The Short Answer

Most 401(k) audits cost between $10,000 and $25,000. The wide range depends on plan complexity, participant count, and the firm you choose. Some plans with thousands of participants or unusual plan features can push above $25,000, but for the vast majority of plans, that range covers it.

At Pepper, our pricing is simple: $10,000 for plans under 500 participants, $12,000 for plans with 500 to 2,499, and custom pricing for plans with 2,500+. Fixed price. No hourly billing. No surprise invoices in October. You know the cost before you commit, and it does not change regardless of how many questions you ask or how many rounds of review your plan needs.

What Drives 401(k) Audit Pricing?

Audit pricing is not random. There are a handful of factors that explain why one plan costs $10,000 to audit and another costs $20,000. Understanding these factors will help you evaluate proposals and push back on quotes that seem inflated.

• Number of participants. This is the single biggest factor. More participants means more sample testing, more data to verify, and more time spent on contribution and distribution testing. A plan with 120 participants is a fundamentally different engagement than a plan with 3,000.
• Plan complexity. Plans with participant loans, hardship distributions, multiple contribution sources, or employer match formulas with vesting schedules require more audit procedures. Each feature adds testing requirements under SAS 136.
• Plan type. A straightforward 401(k) with safe harbor matching is less complex than a plan with profit sharing, cross-tested allocations, or in-service distributions. The more moving parts, the more audit work.
• Document readiness. If your recordkeeper provides clean census data, trust accounting reports, and plan documents quickly, the audit goes faster. If the auditor is chasing documents for months, that adds time. At Pepper, our fixed price does not change based on document turnaround -- but at hourly firms, slow documents mean a bigger bill.
• Firm overhead. Large national firms charge more because their overhead is higher. They have downtown office leases, layers of management, and brand premiums baked into every engagement. Boutique firms specializing in employee benefit plan audits are often more efficient and significantly less expensive -- without sacrificing quality.

The Hidden Costs of "Cheap" Audits

If you receive a quote significantly below market -- say $4,000 for a plan with 300 participants -- proceed with caution. There are real reasons that audit might be cheap, and none of them are good for you.

Common issues with bottom-of-market pricing include:

• Inexperienced staff. The firm assigns first-year associates who are learning on your dime. The audit takes longer, requires more of your time to answer basic questions, and the work product is more likely to contain errors.
• Excessive document requests. Instead of one well-organized request list, you get five to ten rounds of follow-up requests spread over months. Each round interrupts your team and drags out the engagement timeline.
• Missed deadlines. A firm that underbids is often overcommitted. When they fall behind, your Form 5500 filing is at risk. Late filing penalties from the DOL start at $250 per day, up to $150,000. One missed deadline can cost more than the entire audit.
• Cookie-cutter reports. The cheapest firms often use templated workpapers that miss plan-specific issues. They check the boxes without actually understanding your plan, which can leave real compliance problems unaddressed.

Here is the number that should concern every plan sponsor: the Department of Labor reports that 39% of employee benefit plan audits have deficiencies. That means roughly four in ten audits do not meet professional standards. A deficient audit report can trigger DOL enforcement action, require correction filings, and create fiduciary liability for plan sponsors. The cost of fixing a bad audit almost always exceeds what you saved on the fee.

How to Compare Audit Proposals

When you have two or three proposals in hand, resist the urge to just compare the bottom-line fee. The cheapest option is rarely the best value. Here is what to look for:

1. Fixed-fee or hourly? Hourly billing means the final cost is a guess. Ask firms to commit to a fixed fee. If they will not, ask for a cap. If they will not do that either, you are taking on open-ended cost risk.
2. How many document requests will there be? Good firms send one comprehensive request list upfront. If a firm cannot tell you what they need before the engagement starts, they have not done enough EBP audits to be efficient.
3. What is the guaranteed timeline? Your Form 5500 has a deadline. The auditor should commit to completing the audit in time for you to file -- and that commitment should be in the engagement letter.
4. Who will actually do the work? Ask whether the partner who signs the opinion is involved in fieldwork, or whether the entire engagement is delegated to junior staff. The answer matters.
5. Is the firm an AICPA EBPAQC member? The Employee Benefit Plan Audit Quality Center is a voluntary membership that requires firms to meet additional quality standards. It is not a guarantee of quality, but it is a meaningful signal.
6. How many EBP audits does the firm perform per year? Specialization matters. A firm that does 200 benefit plan audits a year will be faster, more accurate, and more familiar with common issues than a firm that does ten.

Why We Publish Our Pricing

We believe plan sponsors deserve to know what an audit costs before committing to anything. No phone calls. No "let us schedule a discovery meeting." No waiting two weeks for a proposal that could have taken two minutes.

We publish our prices on our pricing page because we think transparency builds trust -- and because hiding pricing usually means the price is higher than it should be. If a firm will not tell you what an audit costs until after a sales call, ask yourself what that call is really for.

We wrote more about this decision in our post on why we publish our pricing. The short version: we think the audit industry has an opacity problem, and we are not interested in perpetuating it.