401(k) Contribution Limits in 2023 and 2024
Updated January 29, 2024 at 5:56 pm
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If you participate in your employer’s 401(k) plan, you might be wondering how to maximize your retirement savings without running afoul of 401(k) contribution limits. The good news is that, if you work for a single employer, your 401(k) plan administrator will probably prevent you from making more contributions than are allowed.
But if you change jobs, work for multiple employers, are over 50 and want to make catch-up contributions or work for a smaller employer that offers a SIMPLE 401(k) plan, you might need to manage your contributions so that you don’t go over the IRS 401(k) contribution limit in 2024. Or, if you found out that you accidentally exceeded the 401k 2023 contribution limit, you might need to act before April 15th to correct your overcontribution.
Here’s what you need to know about the 401k max contributions in 2023 and 2024.
Vault’s Viewpoint
- The 2024 elective contribution limit to 401(k) plans is $23,000.
- The total amount of employee and employee contributions to any 401(k) plan is $69,000 in 2024.
- SIMPLE 401(k) plans have lower contribution limits.
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Understanding 401(k) Contribution Limits
Several types of contribution limits apply to your 401(k) plan. The total amount of contributions you can make to a 401(k) plan is limited by the IRS, as are the total amounts that can be contributed to each 401(k) plan you participate in. Depending on your income and your employer’s matching scheme, the actual amount you might contribute Your employer is also required to pass certain nondiscrimination tests. As an employee, here are the most important 401(k) contribution limits you need to understand.
Your Employee 401(k) Contribution Limits
As an employee, you are eligible to defer up to $23,000 in salary in 2024 across all of the 401(k) plans you participate in. For most people who are full-time employees participating in a single 401(k) plan, this is most likely the only number that you’ll need to worry about. In many cases, 401(k) plan administrators will not allow you to defer more than the amount allowed by the IRS.
If you participate in multiple 401(k) plans in a tax year, either because of a job change or because you have multiple employers, you might need to manage your contributions to ensure that you don’t contribute more than is allowed. The other case where you might need to keep track of how much you contribute is if your employer’s 401(k) matching and elective contributions push you over a total 401(k) contribution limit in any single plan.
Total 401(k) Contribution Limits
In addition to the limits on the total amount of your salary you can defer, each 401(k) plan you participate in is subject to overall contribution limits. The IRS limits the amount of overall contributions per plan—if you participate in multiple 401(k) plans from different employers, the total 401(k) contribution limits apply individually to the plans maintained by each employer. They do not apply cumulatively across all of your 401(k) accounts.
In 2024, this total contribution limit is the lesser of 100% of your compensation, or $69,000. The total limit includes your elective deferrals, your employer’s matching contributions, your employer’s additional contributions and any allocations of forfeiture.
This total contribution limit might impact the amount you can defer. If your compensation is lower or if your employer’s contributions to your 401(k) are particularly generous, you might not be able to defer $23,000 to your 401(k).
For example, if you earn $40,000 a year and your employer provides a dollar-for-dollar 401(k) matching contribution, you would only be able to contribute $20,000 a year to your 401(k). The $20,000 you contribute, plus the $20,000 your employer contributes would max out your 401(k) contribution, since it would equal 100% of your compensation.
Catch-Up 401(k) Contribution Limits
If you’re over 50 at the end of the calendar year, you are eligible to make catch-up contributions to your 401(k) plan. For tax year 2024, your maximum catch-up contribution is an additional $7,500. Your total contribution, including your catch-up contribution, cannot exceed your compensation, but catch-up contributions are not subject to the dollar maximum for 401(k) contributions ($69,000 in 2024).
Although the term “catch-up contribution” might seem to imply that you need to be behind in your retirement contributions by some metric, the only IRS requirement is that you are 50 or older. Also, be aware that not all 401(k) plans offer catch-up contributions.
SIMPLE 401(k) Limits
If you work for a small business that offers a SIMPLE 401(k) plan, the elective deferral limit is lower. In 2024, you can defer up to $16,000 of your compensation. While there’s no specific limit to the total dollar amount of contributions made to the account, your employer only has two options for making contributions to your account. Your employer can elect to make either a matching contribution of up to 3% of each employee’s pay or a fixed contribution of 2% of each employee’s pay.
How to Fix Over Contribution
Generally, your employer’s 401(k) plan will limit the amount you can contribute to your 401(k) plan so that you do not exceed 401(k) maximum contribution limits. However, it is possible to overcontribute to your 401(k) plan, especially if you participate in more than one plan. The annual limits on your contributions are cumulative limits that apply to all of the plans you participate in.
If you’ve contributed more than the allowed amount to your 401(k) plans, you can correct this mistake without a tax penalty, but you must act before April 15th. Generally, you’ll be able to receive a distribution of excess deferrals and associated earnings. You’ll be taxed on additional earnings, but you won’t pay a 10% early distribution tax and your distribution isn’t subject to a 20% withholding.
Contact your plan administrator(s) for help with distributing excess deferrals if you think you’ve overcontributed to your 401(k) plans.
Max 401(k) Contribution 2023
Here are the most important 401(k) max contribution limits for 2023.
| Traditional and safe harbor 401(k) plans | SIMPLE 401(k) plan | |
| Elective deferral limit Across all 401(k) plans you participate in | $22,500 | $15,500 |
| Catch-up contribution In addition to your elective deferral if you are 50 or older at the end of the tax year | $7,500 | $3,500 |
| Overall limit on contributions Applies per-plan | The lesser of: 100% of your compensation $66,000 ($73,500 including catch-up contributions) | Overall limit is determined by employer’s contribution of 3% matching contribution or 2% non-elective contribution |
Max 401(k) Contribution 2024
Here are the most important 401(k) max contribution limits for 2024:
| Traditional and safe harbor 401(k) plans | SIMPLE 401(k) plan | |
| Elective deferral limit Across all 401(k) plans you participate in | $23,000 | $16,000 |
| Catch-up contribution In addition to your elective deferral if you are 50 or older at the end of the tax year | $7,500 | $3,500 |
| Overall limit on contributions Applies per-plan | The lesser of: 100% of your compensation $69,000 ($76,500 including catch-up contributions) | Overall limit is determined by employer’s contribution of 3% matching contribution or 2% non-elective contribution |
Frequently Asked Questions
What Is the Maximum Salary to Contribute to a 401(k)?
There isn’t a maximum salary to contribute to a 401(k), however, the amount of your salary that you can use to determine employer and employee contributions is limited to $330,000 in 2023. If you are a highly compensated employee, whether your employer passes the required 401(k) non-discrimination tests could affect your ability to contribute to a 401(k).
Does 401(k) Contribution Limit Include Employer Match?
The $23,000 you can contribute to a 401(k) in 2024 does not include any matching contributions made by your employer. The only way an employer matching contribution could impact the amount you can elect to contribute is if the match would cause a total contribution over $69,000 or the amount of your compensation.
Can I Contribute 100% of My Salary to a 401(k)?
If your salary is less than the $23,000 allowed annual contribution and your employer does not offer a match, you can contribute 100% of your salary to your 401(k). The total amount of contributions to a 401(k) account cannot exceed your compensation—if your employer offers a match or other contributions, you won’t be able to contribute 100% of your salary.
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