Nondiscrimination testing is a set of annual checks required for most employer-sponsored retirement plans—like 401ks—to make sure the plan treats all employees fairly. The goal is to prevent the plan from favoring highly paid employees or business owners over everyone else. These tests look at how much different groups of employees are contributing and whether employer contributions are being shared equally. If a plan fails these tests, the company might need to return some contributions to higher-paid employees or make extra contributions to lower-paid ones. Not all plans are subject to these rules—some, like Solo 401ks or certain safe harbor plans, are either exempt or have simplified requirements. In short, nondiscrimination testing helps ensure workplace retirement plans are inclusive and equitable for all employees.