I have been a Plan Administrator. I sent an employee to set up a Self-directed Account for their SIMPLE IRA, since we had a plan that didn't limit you to only one Broker. He came back with the account info and stated he is ready for the limit of $X. I pointed out that the limit of $X means they set up the wrong Account Type for a SIMPLE IRA; the Brokers and wealth fund managers don't know Employer Plans. You have to read the Employer Plan Document and follow what it states. For this example:

If this is Employee Compensation Deferral, then right there in the terminology = Compensation (payroll) and Deferral (deducted from the paycheck at the time there is paycheck processing) and Reported on Payroll Forms and the W2.

Also, remember that the Employees are not supposed to be able to Touch the funds; they are not allowed to fund the Deferral Component outside of payroll, because that is their Own Money, already, and not Deferred from Gross Wages.

Lastly, when using an outsourced provider, the Employee Deferral is the same as the Tax withholdings = not more expense to the employer, but reducing what would have been the higher Takehome for the employee. You can read in this topic where I previously explained "payroll math."