Does an Employer Match Count Toward Your 401(k) Contribution Limit?

Quick Answer

Employer matching contributions do not count toward the $23,000 401(k) contribution limit in 2024. However, you and your employer may not contribute more than $69,000 combined, plus a $7,500 catch-up contribution for employees age 50 and older.

Smiling woman reviewing 401k documents while at sitting on sofa at home.

Employer matching contributions boost your 401(k) retirement savings by providing a dollar-for-dollar or partial match for every dollar you contribute. It's a big win for retirement savers, but what does the IRS say? When your employer contributes to your 401(k), does the IRS reduce the amount you can contribute yourself?

Thankfully, employer matches do not count toward the 401(k) elective deferral contribution limit. In 2024, eligible employees can add up to $23,000 to their 401(k) retirement plans, regardless of how much their employers contribute. The IRS does set a limit on how much you and your employer can contribute combined, however. To learn more about 401(k) contribution limits and your employer's matching dollars, read on.

Does Your 401(k) Contribution Limit Include Employer Matches?

Employer matching contributions are not included in the annual 401(k) contribution limit for elective deferrals. No matter how much your employer contributes to your 401(k), you are entitled to contribute up to $23,000 of your wages to your 401(k) in 2024.

While the IRS doesn't count employer matching dollars as part of your elective deferral, IRS rules do limit the amount you and your employer can contribute in total. For 2024, your combined contributions can't exceed $69,000 (or $76,500 if you're 50 or older), including any employer match you've received, employer nonelective contributions and allocations of forfeitures.

How 401(k) Contribution Limits Work

To better understand how employer matching dollars fit into 401(k) contribution limits, here's a quick breakdown of how the IRS defines contribution limits.

Elective Deferrals for 401(k) Accounts

​​The IRS limits how much of your wages you can set aside when you contribute to a 401(k). This includes any paycheck contributions you may make throughout the year. Your 401(k) elective deferral contribution limit does not include matching dollars from your employer. You can contribute up to $23,000 in 2024.

Catch-Up Contributions

Catch-up contributions help older workers boost their retirement savings as their retirement years get closer. If you're 50 or older, you're eligible to contribute an additional $7,500 to your 401(k) in 2024.

Combined Employee and Employer Contributions

Matching dollars come into play here. In 2024, the IRS limits total employee and employer contributions to a combined total of $69,000 ($76,500 if you're 50 or older), including employee elective deferrals plus employer matching and other employer contributions. Additionally, your combined employee and employer contributions can't exceed 100% of your annual salary.

Limits for Highly Compensated Employees

As a final check, the IRS also limits the amount of compensation employers can use to calculate an employer match. So, even if you earn $5 million a year, only $345,000 of it may be used to calculate your employer's matching contribution in 2024. If your employer matches 401(k) contributions dollar-for-dollar up to 5%, their matching contribution can't exceed 5% of $345,000, or $17,250.

What if You Contribute Too Much?

If you contribute too much to your 401(k), you'll need to withdraw the excess funds plus any earnings they've generated as soon as possible. If you fix the error before April 15 of the following year, you can course correct without triggering a 10% early withdrawal penalty by paying taxes on the excess amount and earnings. After April 15, you may be subject to double taxation, early withdrawal penalties and possible disqualification of your plan. Talk to your plan administrator right away if you suspect you've over-contributed.

2024 401(k) Contribution Limits

For quick reference, here are the 401(k) contribution limits for 2024.

401(k) Contribution Limits for 2024
Contribution Type Annual Limit
Elective deferrals $23,000
Catch-up contribution (50 and older) $7,500
Combined employee and employer contributions (includes matching dollars) $69,000
Compensation limit $345,000

Source: IRS

The Bottom Line

Simply put, you can contribute up to $23,000 of your earnings to your employer's 401(k) plan ($30,500 if you're 50 or older), regardless of employer matching. If your employer matches your contributions, your combined contributions can't exceed $69,000 in 2024. If you're fortunate enough to be highly compensated, your employer can't use more than $345,000 of your salary to calculate a matching contribution.

Contribution limits are reviewed each year for cost of living. It's a good idea to plan ahead and adjust your 401(k) contributions to fit within annual limits—and to remove any excess contributions you've accidentally made the prior year before you incur a penalty.