The ADP (actual deferral percentage) test is one of the annual non-discrimination tests mandated by the IRS for a 401k plan to ensure that contributions made by nonhighly compensated employees are proportional to contributions made for highly compensated employees. A participant’s actual deferral ratio (ADR) is calculated by dividing the participant’s elective deferrals by the participant’s compensation. Each eligible (even those who chose not to defer) NHCE’s ratio is calculated and then averaged for the group.