How Much can My Employer Contribute to my 401K?
401K Employer Maximum Contributions
I’d like to clear up a very common 401K misconception surrounding maximum contribution limits.
Question: The IRS maximum 401K contribution limit for 2014 is $17,500 (and $18,000 for 2015). But what exactly does this mean? Does this mean that if my employer matches my contribution dollar-for-dollar that I can only contribute half of the maximum (i.e. $8,750 in 2014)?
Answer: No. The IRS maximum 401K contribution is how much you can personally contribute to your 401K during the year. Your employer’s 401K contribution limit is entirely up to them – but the max on total contributions (employee plus employer) to your 401K in 2014 is $52,000 and $53,000 in 2015 (or 100% of your salary, whichever is less). Technically, this means that your employer could contribute up to $34,500 in 2014 ($35,000 in 2015), if they wanted to, and it would not count against your personal contribution maximum.
Employer 401K Maximum Limit Discussion:
- What is your employer’s match?
- Did you think that your maximum contribution was your personal plus your employer’s?
- Are you going to max your 401K contributions this year?