Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A 401(k)'s full contribution capacity comes from employee deferrals and employer contributions counted separately against their own limits, not one blended cap, so an employee focused only on their own deferral limit can miss additional capacity the employer match or profit-sharing contribution still has room for.
Before you rely on it
What to check
Check the employee deferral limit and the overall combined plan limit separately, since employer contributions can add real additional capacity beyond the employee's own deferral cap.
The common error
Where people go wrong with 401(k) contribution calculator
Assuming the employee deferral limit is the plan's total contribution ceiling. Employer contributions count against a separate, higher combined limit, and treating the two as one figure understates total available capacity.
Sensitivity evidence
How employee contribution election changes the employee contribution
| Employee contribution election | Employee contribution | Total employee and employer contributions | Unused overall plan capacity |
|---|---|---|---|
| 11.0% | $11,000 | $17,000 | $55,000 |
| 13.0% | $13,000 | $19,000 | $53,000 |
| 15.0%worked example | $15,000 | $21,000 | $51,000 |
| 17.0% | $17,000 | $23,000 | $49,000 |
| 19.0% | $19,000 | $25,000 | $47,000 |
Every input, tested
Which input moves the employee contribution most
| Input | Tested from | To | Employee contribution at each end | Swing |
|---|---|---|---|---|
| Employee contribution election | 13.0% | 17.0% | $13,000 to $17,000 | $4,000 (27%) |
| Eligible annual compensation | $90,000 | $110,000 | $13,500 to $16,500 | $3,000 (20%) |
| Applicable employee deferral limit | $22,050 | $26,950 | $15,000 to $15,000 | none |
| Employer contribution | $5,400 | $6,600 | $15,000 to $15,000 | none |
| Applicable overall plan limit | $64,800 | $79,200 | $15,000 to $15,000 | none |
Two variables at once
Employee contribution by employee contribution election and eligible annual compensation
| Employee contribution election \ Eligible annual compensation | $80,000 | $100,000 | $120,000 |
|---|---|---|---|
| 11.0% | $8,800 | $11,000 | $13,200 |
| 13.0% | $10,400 | $13,000 | $15,600 |
| 15.0% | $12,000 | $15,000 | $18,000 |
| 17.0% | $13,600 | $17,000 | $20,400 |
| 19.0% | $15,200 | $19,000 | $22,800 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Eligible annual compensation | $100,000 |
| Employee contribution election | 15.0% |
| Applicable employee deferral limit | $24,500 |
| Employer contribution | $6,000 |
| Applicable overall plan limit | $72,000 |
| Employee contribution | $15,000 |
| Total employee and employer contributions | $21,000 |
| Unused overall plan capacity | $51,000 |
Where the inputs come from
Eligible annual compensation is the pay the plan counts, which may exclude bonuses. The election is the percentage of pay you defer, and the employee deferral limit is the IRS annual cap, which is $24,500 in the example and rises with inflation, with extra catch-up room for those 50 and older. The overall plan limit includes employer money, and the employer contribution is the match or profit sharing you expect. Your plan document has the exact rules.
Using the employee contribution in a real decision
Watch for front-loading, which can miss the match.
When the result stops applying
Limits change each year, and higher catch-up amounts apply at certain ages. Highly compensated employees may face testing that reduces what they can contribute. Contributions above the limit must be removed or they are taxed twice. If you have several employers, the employee limit applies across all your plans, while overall limits apply per employer.
What to compare it with
Check the match with the 401(k) match calculator, and the after-tax route with the mega backdoor Roth page. The 403(b) contribution calculator uses the same structure for nonprofit plans, and the IRA pages cover separate accounts. The retirement savings calculator projects the balance.
People also ask
Frequently asked questions
What is the 401(k) contribution limit?
The IRS sets an annual employee deferral limit that rises with inflation, plus catch-up contributions for people 50 and over. The limit applies to all your 401(k) and 403(b) accounts combined.
What is the overall limit?
The total that can go into your account in a year from you, your employer and any after-tax contributions, which is much higher than the employee limit.
Should I choose Roth or traditional in my 401(k)?
Traditional gives a tax deduction now, and Roth gives tax-free withdrawals later. The better choice depends on whether your tax rate is higher now or in retirement.