401(k) Contribution Limits: Employee, Match and Total Plan Rules

401(k) limits are confusing because people often talk about the 401(k) limit as if there were only one number. There are actually several related limits that apply to different kinds of contributions.

The most important distinction is between your employee salary deferrals and the overall amount that can enter the plan from employee and employer sources.

The employee deferral limit

For 2026, MFA's annual-rules engine uses an employee 401(k) deferral limit of $24,500, before any applicable catch-up contribution.

This limit generally applies to your Traditional and Roth 401(k) salary deferrals combined.

If someone contributes $15,000 to a Traditional 401(k) and $10,000 to a Roth 401(k), the plan does not treat those as two independent annual limits. They are both employee elective deferrals.

That is one of the most common retirement-account mistakes: assuming Roth and Traditional each get a separate full 401(k) limit.

Employer match is a different bucket

An employer match does not normally reduce the basic employee-deferral limit.

Suppose an employee contributes the full employee limit and the employer adds another $8,000 under the plan's matching formula. The employer contribution generally counts toward the broader overall defined-contribution limit, not against the employee's ordinary salary-deferral limit.

For 2026, MFA's annual-rules engine uses an overall defined-contribution limit of $72,000, subject to the applicable IRS rules and compensation limits.

This is why someone can sometimes have more than the employee-deferral limit deposited into a 401(k) during the year.

Catch-up contributions add another layer

Eligible participants can have additional catch-up contribution capacity based on age and current law.

The catch-up rules have become more nuanced, including a higher catch-up amount for certain ages under current law. Because these figures can change annually, MFA reads them from the annual-rules engine instead of printing one number permanently into a calculator.

If you are near a catch-up age, check the current year's IRS rules and your payroll system rather than relying on last year's contribution election.

What if you have two employers?

The employee elective-deferral limit generally follows you, not each employer plan separately.

If you change jobs during the year and contribute to two different 401(k) plans, you need to track the combined employee deferrals.

Example:

• Old employer 401(k): $12,000 employee deferral
• New employer 401(k): $15,000 employee deferral

The plans may not automatically know what you contributed to the other employer. Payroll systems can each appear internally correct while your combined annual deferrals exceed the personal limit.

A job change is therefore a good time to review year-to-date retirement contributions before setting a new payroll percentage.

Employer contributions can vary dramatically

Two people who each defer the same amount can finish the year with very different total plan contributions because of:

• matching formulas;
• nonelective employer contributions;
• profit-sharing contributions;
• eligible compensation definitions;
• true-up provisions;
• vesting rules.

That is why MFA separates the 401(k) Contribution Calculator from the 401(k) Match Calculator. One contribution percentage is not enough to describe the entire plan.

After-tax contributions are not the same as Roth contributions

Some plans allow employee contributions beyond the normal salary-deferral limit as after-tax 401(k) contributions.

These are different from Roth 401(k) elective deferrals.

After-tax contributions can be relevant to a mega backdoor Roth strategy when the plan also permits the necessary conversion or distribution mechanics. They use space under the overall plan limit and must be coordinated with employer contributions and other plan deposits.

Do not assume your plan supports after-tax contributions simply because it offers Roth 401(k) contributions.

A worked example

Suppose a participant has:

• $180,000 of eligible compensation;
• employee salary deferrals up to the current annual limit;
• a 50% employer match on the first 6% of eligible compensation.

Six percent of $180,000 is $10,800. A 50% match on that amount is $5,400.

If the employee contributes enough to capture the entire match, the employer's $5,400 is in addition to the employee deferral, while both amounts count toward the applicable overall plan limit.

If the plan also supports profit sharing or after-tax contributions, those can use more of the overall capacity.

Do not confuse contribution limits with deduction limits

Traditional 401(k) salary deferrals generally reduce current federal taxable wages under the applicable rules, while Roth 401(k) contributions do not provide the same current federal income-tax deduction.

But the employee contribution limit is not doubled because the tax treatment differs.

This is why Roth-versus-Traditional is a tax-timing decision, while the annual contribution limit is a separate plan-rule issue.

What to check in your own plan

Before trying to “max out” a 401(k), answer these questions:

1. What is the current employee salary-deferral limit?
2. Are you eligible for a catch-up contribution?
3. How much have you already contributed this calendar year, including at prior employers?
4. What compensation does the employer match apply to?
5. Is the match calculated each paycheck?
6. Does the plan provide a true-up?
7. Are employer contributions vested immediately or over time?
8. Does the plan permit after-tax contributions?
9. Does it permit in-plan Roth conversion or in-service rollover if that strategy matters to you?

The phrase “max my 401(k)” can mean several different things. For most employees it means reaching the employee-deferral limit. For others, especially in plans with after-tax contribution features, it can mean using more of the overall defined-contribution limit.

The cleanest approach is to identify which bucket each dollar belongs to, then run the current-year limits rather than relying on one headline number.