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 individual IRS maximum 401K contribution limit is $19,000 for 2019 and $19,500 for 2020 ($25,000 and $26,0000 if you include the catch-up contribution for those age 50+). 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?

maximum employer 401K contributionAnswer: No. The IRS maximum 401K contribution is how much you can personally contribute to your 401K during a calendar year. Your employer’s maximum 401K contribution limit is entirely up to them – but the max on total contributions (employee plus employer) to your 401K is $56,000 in 2019 and $57,000 in 2020 (or 100% of your salary, whichever is less).

Technically, this means that your employer could contribute up to $37,000 in 2019 and $37,500 in 2020, separate from your maximum personal contribution.

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?

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