Maximum Employee and Employer 401k Contribution Limits and Catch-up Amounts


[Updated with 2013 changes] I recently received a few questions regarding 401k retirement plans and contribution limits. The first thing to understand is that there are two main types of contributions that go into these plans. One is your contribution, or elective deferral, and the other is your employers, or matching, contribution. Secondly there are four annual contribution limits you need to be aware of : Your employee contribution (elective deferral or 402g) limit, catch-up contribution limits, employer contribution (415) limits and maximum annual contribution limits.

For 2012, the maximum employee (elective deferral) contribution limit across all 401k plans is $17,000 (vs. $16,500 in 2011). The 2012 maximum annual contribution is $50,000 (in 2011 it was $49,000), which includes elective deferrals, employer matching and discretionary contributions, but excludes catch-up contributions (see below). In addition, the amount of employee compensation (especially for higher income earners) that can be taken into account when determining employer and employee contributions was $245,000 for 2011 and $250,000 for 2012.

For 2013, the maximum employee (elective deferral) contribution limit across all 401k plans is $17,500 with the maximum annual contribution rising to $51,000. The amount of employee compensation (especially for higher income earners) that can be taken into account when determining employer and employee contributions rose to $255,000 for 2013.

2013 401k, 403b, TSP Maximum Contribution Limits

Click here for 2014 401K and IRA Contribution Limits

Maximum Employer contribution limits. Matching 401K or 403b contributions made by your employer are counted towards your annual contribution limit.  This  means your employer’s 401K maximum contribution limit in 2012 is $33,000 (and $33,500 in 2013) or 100% of your salary, whichever is the smaller amount. Though most employers rarely give anywhere near the maximum, with most generally matching 3% to 6% of employee contributions.

Catch-up contributions. If you are age 50 or over at the end of the calendar year, you are permitted to make additional, “catch-up”, elective deferral contributions. For 2012 and 2013, the maximum catch-up contribution limit is $5,500. These catch-up contributions are not subject to the annual general limits that apply to 401k plans. The catch-up contribution you can make for a year cannot exceed the lesser of the annual catch-up contribution limit, or the excess of your compensation over the elective deferrals that are not catch-up contributions.

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{ 24 comments… read them below or add one }

rani February 19, 2013 at 3:10 pm

I have a similar question to Jim above (james answered to contact him, but he doesnt state an email adress).
My company caps 401K contribution on all HCE. I dont make quite as much as Jim, but regarldess I am capped at 10% of my salary. I dont reach the 17K in contribution, what are my options otehrwise? My IRA deductions wont count since I get phased out, correct?

Thank you for the help/clarification.


Andy January 22, 2013 at 10:41 am

Does the 401(k) max contribution limit include the employer match? Matching 401K or 403b contributions made by your employer are counted towards your annual contribution limit.


Jill January 22, 2013 at 2:50 am

Hi there…my husband just started at a new company. When he hit the 6 month mark, his employer deducted 50% of his earnings for 401k and this is mandatory. This will put him well over the 17,000 mark at the end of the year. Can they do this?


Andy January 22, 2013 at 10:34 am

No…they should not be able to do this unless there was something in his contract that specified it. This seems rather strange and against the law.

New rules allow employer to enroll employees into a plan by default with a 3 to 6% contribution rate (I have never heard of a 50% above the max contribution). But employees can opt out of this.

So can employers force me to make 401K contributions? short answer – No.


frank January 7, 2013 at 6:32 pm

Andy, very succinct and understandable write-up! Question (because of info I have from other sources): I am 61 and am a HCE in cross-tested 401K. Is my total max target contribution permissible for 2012 $50,000 or $55,500? Is it the $50G you cite PLUS the $5500 catch up? I.E. $5500 catch-up, $17000 K election, and $33000 employer contribution? And for 2013: $5500 catch-up, $17500 K election, and $33500 employer contribution = $56,500 total? And is there a % limit on the employer contribution. e.g. not more than X% of my compensation (other than the 100% limit of course)? Thanks


Andy (Author) January 7, 2013 at 8:30 pm

Catch-up contributions are not subject to the annual general limits – so your limit would be $55,500. Your employer may or may not match your catch-up contribution (generally not) but their contribution would also not be in the maximum threshold (so technically you could have up to 61K max contribution in a year).

The employers only need to contribute a % up to the employee salary of 250,000 in 2012 and 255,000 for 2013. So if you earn more than this, your employer does not need to use your higher wage base. For example if you employer matches up to 6%, then the max they have to contribute is .06*250,000 = $15,000 in a given year.


Andy (Author) January 7, 2013 at 8:42 pm

Frank – just did some more research and HCE compensation definition dollar threshold s are $115,000 for 2012. So your employer contribution maximum maybe lower (depending on their matching %)


Peter April 11, 2013 at 2:45 pm

Can an employer’s match equal the employee’s match even if it exceeds the $250,000 in income earned (in 2012)? As an example, if the matching program is 100% of the first 5% of employee deferral and an employee contributed the full $17,000 to the plan can the employer match also be $17,000? Or are they limited to 5% of $250,000 ($12,500)?


Tom B December 28, 2012 at 9:24 am

Hi Andy, can the employee participate in the catchup contribution each year that the employee is 50 years old? Or is there a catchup limit or cap similar to the 15 year rule? Can the employee that is 50 years old by the end of 2013 contribute the catch up amount each year thereafter?
Thank you,


Andy (Author) December 28, 2012 at 11:09 am

Short answer is yes. For 401K and IRA’s though you need to take a requirement minimum distribution after age 70 and so the tax benefits get less beneficial. See this article for more :


Missy November 19, 2012 at 2:21 pm

With so much risk around not having enough for retirement, why the heck is there ANY limit on 401K contribution by the employee. I gather it is so people do not avoid current taxes, but in the future it will be higher taxes anyway.

As such, many more Americans are working longer with risk of injury on job and then really out of luck. Our government along with SS is saying… Hurry up and die.


Jim September 17, 2012 at 5:43 pm

I just received my 9-15-12 pay stub and there was no money taken out for my 401k. When I talked with HR they said I had was considered a highly compensated employee ($250K) for 2012 and when you reach that level you can no longer deposit any money into your 401k regardless of how little you have contributed. My point being that if you say had only put 10,000 in your account through and you reach the highly compensated level limits for 2012, your 401k deduction is stopped and you get cheated for the remainder of the year. I have a few questions.

Does anyone know what would happen if you received a $250K check on January 1st? Does that mean you cannot contribute at all to your 401k?
Does anyone know if the catch up contributioin for those over 50 counts against me as well? I was thinking that I could now or in January start adding in more money using my catch up contribution to help make it at least a little more palatable and get me to the $17000 max before I hit $250K again?
I was also wondering if I got to the $17,000 limit before I hit $250K will they want money back when I do?

I hope these questions make sense. THanks, Jim


James December 20, 2012 at 6:21 pm


You would need to ask your HR manager if they have the results of the non-discrimination tests for your (the ADP and ACT) for the 401(k). There are solutions for this situation but we would need to discuss the options with your company.


Linda August 17, 2012 at 12:42 pm

If married filing jointing, and the spouse doesn’t work, does the amount double, and if so, can the entire contribution of the doubled amount be made from the working spouse’s compensation?


andys2i August 17, 2012 at 10:16 pm

Unfortunately no. 401K limits are per employee/person. However you can open a regular or Roth IRA for your non-working spouse. See more here –


Bill M August 4, 2012 at 7:11 pm

Can’t find the answer to this anywhere. Does 401K loan interest count against the contribution limits?


andys2i August 6, 2012 at 1:37 pm

Loan repayments are not contributions. Meaning that they do not impact the annual contribution limit ($17K in 2012).


DMC May 31, 2012 at 9:36 am

I think there is an error in your statements above. I believe the $33,000 is not just the employer limit. It is the total limit, which could include both employer contributions and employee after tax contributions.


pilgrim lady February 25, 2012 at 4:49 am

After many years of working in our organization (403b) without pay I am now on the payroll. How is my maximum contribution calculated with a Salary of $60,000., but no previous years of salary? Can I put in the full $17,000. Also at what time in the year can I pay the $5500 catch-up (I am 62).


Ray Siso Jr January 19, 2012 at 6:38 am

I would like to know if there is any provision for contributions to a 401 (k) plan in the current year to apply to the previous year. If so where can I find information on this issue.


andys2i January 20, 2012 at 9:25 am

Generally contributions to a 401K plan are only valid in the year they are made. However some employers do allow payments till Apr 15. However for an IRA or Roth IRA, you can make 2011 eligible contributions until Apr 17, 2012.


Marie January 3, 2012 at 3:34 pm

Andy, can you please explain your contradicting statements “The 2012 maximum annual contribution is $50,000 (in 2011 it was $49,000), which INCLUDES elective deferrals, EMPLOYER MATCHING and discretionary contributions, but excludes catch-up contributions (see below). ” vs. the next paragraph where you state: “Maximum Employer contribution limits. Matching 401K or 403b contributions made by your employer are NOT counted toward your annual 401k contribution limits.” Which one is it? Does the annual limit include employer matching or not? Am I reading this incorrectly??


andys2i January 5, 2012 at 12:15 am

Marie – Thanks for the great question and catch. The maximum annual limit does include the employer match, but not the catch-up contribution. So in 2012, the $50,000 limit is made up of an employee (your) maximum of $17,000 vs $33,000 employer limit. The catch up contribution for those over 50 is $5500.

I have updated the article to correct this.


Donald December 3, 2011 at 12:09 pm

If your employer does not contribute to your 401k, then you are better off maxing out your own IRA first. You have many more and usually safer options. In addition, if you work for a small business, you are at the mercy of your employer’s possible incompetence and negligence. My own employer is particularly irresponsible at keeping up with his fiduciary duties. Employee contributions are deposited to the fund on a completely haphazard basis. And short of quitting, there is nothing we can do about it and still stay on the boss’ good side. Does anyone know if what he is doing (or not doing) is illegal and how one would go about reporting him to the proper authorities? Personally I quit contributing to my 401k years ago.


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