Compensation paid after severance that is payable solely due to termination of employment (and not for services performed) is not eligible compensation for either employee deferrals or employer contributions in a 401(k) plan.

Compensation earned during employment (regular wages, commissions, bonuses) that is paid* after severance is eligible compensation if paid by the later of: 

(a) 2½ months after severance; or 

(b) The end of the Plan year during which the severance occurred.

*If compensation is paid in the next plan year but within a few days due to timing of pay dates, can include in either year, but must be consistent.