Deferral only 401k plan with one 100% owner, wife and 3 kids work for him, wife and kids HCE by attribution not comp. Other non owners HCE by comp.
To select top paid group, what is the order of selection, by attribution or by comp?

I did not think that ownership was a factor in determining the top-paid group.

Top paid group deals strictly with the compensation test. Your ownership test must still be performed.

to make it simple:

first list your people by comp.
the top 20% with comp > than the limit are HCEs.

now, in addition to those people, add anyone else who is a 5% owner

the way you explained it might be a little confusing--(at for me)
if you have 10 ee's in the count and you have 3 owners (attrib or otherwise) you won't look at the comp test part.
start the count with >5% owners and if you still need to bring in hce ee's move to comp test

lets use your example
I have 10 ees , 3 are owners

20% says I need 2 ees due to comp

ee 1 200000
ee 2 200000
ee 3 100000 owner
ee 4 100000 owner
ee 5 100000 owner
ee 6 - ee 10

I will have 5 HCEs in the plan.

I brought in the top 2 by comp, and then added back any owners.

If I start with the owners, I might say, I have 3 owners. Since my 20% count was only 2, I don't need to bring anyone else in. that would be incorrect.

That is why I always recomend listing the ees by comp and bring in the number in the count. then add back any additional owners.

sorry --bad example

1. if there is an excluded class(per diems) are they in the count?
2. if an ee terms 1/5/04 they are not in the 2005 count?

i think they are in--as long as they are not excluded for the 17 1/2 hrs/week or the seasonally 6 month rule
if the ee was hired in 2002 for ex, they are in --doesn't matter if they don't have 6 months i the plan yr--its 6 months of total service

last ?-- can you round down --ex count is 8.8 -is this 8 or 9 hce's?

you can use 8--if you are using relius- you'll have to override the count--they round up