401(k) Contribution Limits For 2025

A workplace 401(k) plan helps you save a substantial amount each year for retirement, but there are annual limits on contributions by you and your employer.

Whether you choose a traditional 401(k) for the upfront tax break or a Roth 401(k) for tax-free income in retirement (or both), the contribution limits are the same.

401(k) Contribution Limits for 2025

For 2025, the 401(k) contribution limit for employees is $23,500, or $31,000 if you are age 50 or older. This amount is up modestly from 2024, when the individual 401(k) contribution limit was $23,000, or $30,500 for employees who were 50 or older. 2025 is also the first year that a new, higher catch-up contribution limit applies to workers aged 60, 61, 62 and 63 who can now can contribute up to $34,750.

These individual employee limits are cumulative across multiple 401(k) plans. If you leave one job in order to start a new position in calendar year 2025, your total combined contributions to plans at both employers are limited to $23,500, or $30,500 if you’re 50 or older.

Employer 401(k) matching or non-matching contributions do not count toward your individual contribution limit.

You may also be able to make non-tax-deductible contributions to traditional 401(k)s above the employee contribution limit. About a fifth of 401(k) plans allow employees to make these kinds of contributions, which are still subject to the 2024 maximum of $69,500, or $77,000 if you are 50 or older.

Maximum 401(k) Contribution Limits for 2024

Total 401(k) plan contributions by an employee and an employer cannot exceed $69,500 in 2025. Catch-up contributions bump the 2025 maximum to $77,000 for employees who are 50 to 60 and up to $81,250 for employees who are 60 to 63 . Total contributions cannot exceed 100% of an employee’s annual compensation.

Many employers offer 401(k) matching contributions as part of their job benefits package. That means they agree to duplicate a portion of your contributions up to a set percentage of your salary. In addition, some employers may also share a percentage of their profits with employees in the form of non-matching contributions.

While an employer’s 401(k) matching and non-matching contributions don’t count toward your annual employee deductible contribution limits, they are capped by total contribution limits.

Vanguard data from 2022 show that among 401(k) plans the firm administered, 95% of employers provided matching or non-matching contributions to their employees. Approximately 69% of plans provided a 401(k) match to their employees. Another 10% provided non-matching 401(k) contributions. And 36% provided both types.

While the annual limits for individual contributions are cumulative across 401(k) plans, employer contribution limits are per plan. If you were to participate in multiple 401(k) plans in one calendar year (like in our example above, if you left one job and started a new position), each of your employers could max out their contributions.

Traditional vs Roth 401(k) Contribution Limits

Like individual retirement accounts, 401(k)s are available as either traditional and Roth accounts. Both types have the same annual employee and employer contribution limits.

Traditional 401(k)s

A traditional 401(k) lets you deduct the amount of your total employee contributions from your taxable income each year. In broad terms, this means if you made $50,000 and contributed $5,000 to your traditional 401(k), you would be taxed as if you made $45,000. In retirement or after age 59 ½, you pay income taxes on withdrawals based on your marginal tax rate at that time.

Roth 401(k)s

With a Roth 401(k), you contribute money on which you’ve already paid taxes. Withdrawals made after age 59 ½ are tax-free, as long it has been at least five years since your first contribution. Roth 401(k)s come with a few caveats:

• Not all employers offer Roth 401(k)s, although their prevalence is rapidly increasing.
• If your company offers a 401(k) match, some—but not all—plans allow you save it in a Roth account. Some plans may still require employer matching contributions to be saved in a traditional 401(k) account.
• Unlike Roth IRAs, Roth 401(k)s have no income restrictions, meaning anyone with access to a Roth 401(k) may contribute to it.

Starting in 2024, Secure Act 2.0 mandated that catch-up contributions to 401(k) plans must be made to Roth accounts for employees earning more than $145,000 a year.

401(k) Contribution Limits for Highly Compensated Employees

Some 401(k) plans have extra contribution limits on employees who are highly compensated. (If your employer has set up a Safe Harbor 401(k) plan and you are a high earner, these limits may not apply to you.)

Highly compensated employees (HCEs) can contribute no more than 2% more of their salary to their 401(k) than the average non-highly compensated employee contribution. That means if the average non-HCE employee is contributing 5% of their salary, an HCE can contribute a maximum of 7% of their salary. In addition to the federal limit, your company may have specific caps established to remain compliant.

The IRS determines you are a HCE if:

• Either you owned 5% or more of a company last year and are participating in its 401(k) plan this year.
• Or you earned $150,000 or more in 2023 from a company with a 401(k) plan you’re participating in this year.

Unlike most other 401(k) limit guidelines, HCE classifications are based on your status from the previous year.

If HCE contribution rates exceed non-HCE contribution rates by more than 2%, companies’ workplace retirement plans may lose their tax-advantaged status. As a HCE, you may be prevented from contributing to your 401(k) to the employee contribution max due to low 401(k) participation rates. You should still be able to make catch-up contributions on top of your HCE cap if you are eligible, though.

If you’re capped by HCE limits but still want to contribute more, consider funding a retirement account outside of your employer-sponsored plan, such as a traditional IRA.

Related: Find A Financial Advisor In 3 minutes

What Happens If You Contribute Too Much to Your 401(k)?

If your 401(k) contributions exceed the limits above, you may end up being taxed twice on your excess contributions: once as part of your taxable income for the year that you contribute and a second time when you withdraw from your plan. Earnings still grow tax-deferred until you withdraw them.

If you realize you contributed too much to your 401(k), notify your HR department or payroll department and plan administrator right away. During a normal year, you have until your tax filing deadline—usually April 15—to fix the problem and get the money paid back to you.

Excess deferrals to a 401(k) plan will have to be withdrawn and returned to you. Your human resources or payroll department will have to adjust your W-2 to include the excess deferrals as part of your taxable income. If the excess deferrals had any earnings, you will receive another tax form that you must file the following tax year.

How Much Should I Contribute to My 401(k)?

A workplace 401(k) account can be a powerful tool to help build your retirement savings. To maximize your 401(k) benefits, follow these tips:

1. Set your contribution level to take full advantage of your employer’s 401(k) match. If your company matches a certain percentage of your contributions, set your contribution level to take maximum advantage of the match. Otherwise, you’re leaving money on the table.

2. Start contributing to your 401(k) immediately.

3. Take advantage of target-date funds. If you’re overwhelmed by the investment options offered by your 401(k) plan, choose a target-date fund aligned with your anticipated year of retirement. Target date funds are optimized for your retirement timeline, making them great options for beginners or more hands-off investors.

4. Increase your 401(k) contribution percentage regularly. Each year, increase your 401(k) contribution rate by at least one additional percentage point. Gradual small increases have a minor impact on your take-home pay and a major impact on your retirement nest egg over time. In addition, if you receive any raises or bonuses, dedicate at least a portion of them to your savings.

5. Understand the vesting period for your employer’s 401(k) match. Your employer’s 401(k) matching contributions may have a vesting period. This means you remain with the company for a number of years before you take ownership of the full value of your employer’s contributions to your 401(k) account. If you don’t remain with the company until you’re fully vested, you could lose some or all of the value of these matching contributions.

6. When you switch jobs, roll over your 401(k). Each year, hundreds of thousands of workplace retirement plans are misplaced or forgotten by employees. If you like your current 401(k), make sure you keep up with its login information and check in regularly. If your plan will charge you high fees when you’re no longer with the company or you don’t like the investment options, roll it over into your next job’s retirement plan or an IRA.