401(k) Contribution Limits for 2025 vs. 2026

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The 2026 401(k) contribution limit for employee salary deferrals is $24,500, up $1,000 from $23,500 in 2025. Workers age 50 and older can add a catch-up contribution of $8,000 in 2026 (up from $7,500 in 2025). Workers who are 60, 61, 62 or 63 can use a larger catch-up of $11,250 instead. Separately, the cap on everything that goes into your account in a year, including employer money and after-tax contributions, rises to $72,000 in 2026 from $70,000 in 2025.

2025 vs. 2026 401(k) limits side by side

The employee deferral limit

This limit covers every elective deferral you make from your paycheck. Traditional pre-tax deferrals and designated Roth 401(k) contributions count together, split however your plan allows.

The limit applies to you as a person, not to each plan. If you change jobs mid-year or hold two jobs with separate 401(k) plans, all your deferrals share one $24,500 limit in 2026. Your new employer’s payroll has no record of your old deferrals, so tracking the running total is your responsibility.

The same deferral limit applies to 403(b) plans, most 457 plans and the federal Thrift Savings Plan, and SIMPLE IRA deferrals count against it. Traditional and Roth IRA contributions do not, so you can max out a 401(k) and still fund an IRA, which has its own limit of $7,000 for 2025 and $7,500 for 2026.

One exception is a governmental 457(b) plan. Its deferral limit is separate from the 401(k)/403(b) limit, so an employee with access to both a 403(b) and a governmental 457(b) can defer the full amount into each.

Catch-up contributions

Age 50 and older

If you reach age 50 at any point during the calendar year, you can make catch-up contributions for that whole year, even if your birthday is December 31. The catch-up sits on top of the regular deferral limit.

Catch-up contributions are a plan feature. Most plans offer them, but your employer’s plan has to permit them for you to use them.

Ages 60 to 63

The SECURE 2.0 Act created a higher catch-up for workers who turn 60, 61, 62 or 63 during the year. For both 2025 and 2026, that amount is $11,250. It replaces the standard catch-up; you do not get both. Once you turn 64, you drop back to the regular age-50 catch-up.

Roth requirement for higher earners in 2026

SECURE 2.0 also requires catch-up contributions to be made as Roth contributions if your prior-year FICA wages from the employer sponsoring the plan exceeded a set threshold ($145,000 in the statute, indexed for inflation). This rule applies starting in 2026. The practical effects:

• Affected workers give up the current-year tax deduction on their catch-up dollars. In exchange, qualified withdrawals of that money later are tax-free.
• If your plan does not offer a Roth option, a worker over the threshold may be unable to make catch-up contributions at all.
• The test uses wages from that employer only. Self-employment income and wages from other jobs are not part of it.
• Regular deferrals up to $24,500 can still be pre-tax for everyone. Only the catch-up portion must be Roth.

The total limit: employer and after-tax contributions

A second, larger cap governs the total that can enter your account in a year from every source: $70,000 for 2025 and $72,000 for 2026, or 100% of your compensation if that is less. Three types of money count toward it:

1. Your elective deferrals, pre-tax and Roth.
2. Employer contributions, such as matching contributions or profit-sharing and other nonelective contributions an employer may make regardless of how much you defer.
3. After-tax (non-Roth) contributions, if your plan offers them.

Catch-up contributions are excluded from this cap and added on top. That is why the combined ceiling reaches $80,000 for a 55-year-old in 2026 and $83,250 for a 61-year-old.

Employer matches usually follow a formula, for example 50 cents or a dollar for each dollar you contribute, up to a percentage of salary. Matches do not reduce your $24,500 deferral room. They count only against the $72,000 total.

After-tax contributions let savers who have already hit the deferral limit fill the gap between their deferrals plus employer money and the total cap. Some plans allow these dollars to be converted to Roth inside the plan or rolled into a Roth IRA, a strategy often called a mega backdoor Roth. Whether that is possible depends entirely on your plan’s rules.

Solo 401(k)

A self-employed person with a solo 401(k) acts as both employee and employer. The deferral and total limits work the same way, but the employer contribution is generally limited to 25% of W-2 pay for an incorporated business owner, or effectively about 20% of net self-employment earnings for a sole proprietor. Deferrals into a day job’s 401(k) share the same deferral limit. The total limit is generally applied per unrelated employer.

Highly compensated employees

High earners can find their actual deferral room below the IRS limit. A highly compensated employee (HCE) is generally a 5% owner of the business or someone whose prior-year pay exceeded an IRS threshold.

Traditional 401(k) plans must pass nondiscrimination tests each year. The actual deferral percentage (ADP) test compares the average deferral rate of HCEs with that of everyone else, and the actual contribution percentage (ACP) test does the same for matching and after-tax contributions. If rank-and-file employees defer little, the plan can fail. The usual fix is to refund some HCE contributions after year-end or to cap HCE deferrals in advance.

Safe harbor plans, which commit to a set employer contribution, are exempt from the ADP test. If you are an HCE in a plan that is not a safe harbor plan, ask your plan administrator whether a refund cap applied in prior years before you count on contributing the full limit.

What happens if you contribute too much

Over-contributing most often happens after a job change, when two plans each let you defer up to the full limit. If your total deferrals for the year exceed the limit, notify your plan, and the excess plus any earnings on it must be distributed to you by April 15 of the following year.

When corrected on time, the excess is taxable in the year you deferred it, and the earnings are taxable in the year they are distributed. If the excess stays in the plan past April 15, it is taxed twice: once in the year contributed and again when it eventually comes out.

Worked examples

Both are hypothetical and assume the plan offers catch-up contributions and has no HCE restrictions.

Example 1: a 40-year-old maxing out in 2026

Salary of $120,000, paid every two weeks (26 paychecks). Hitting $24,500 requires about $942.31 per paycheck, or roughly 20.4% of pay. The employer matches 100% of the first 4% of salary, adding $4,800. Total going in: $29,300, well under the $72,000 cap.

Example 2: a 61-year-old using after-tax contributions in 2026

Deferrals of $24,500 plus the $11,250 age 60 to 63 catch-up equal $35,750. The employer contributes $10,000. Excluding catch-up, the total so far is $34,500, which leaves $37,500 of room under the $72,000 cap for after-tax contributions, if the plan allows them and compensation is high enough. The account could then receive up to $83,250 for the year.

Spreading contributions across the year

Plans generally ask you to elect a percentage of pay. Divide the annual target by your number of paychecks, then by gross pay per check, and revisit the election when your salary changes or the limit rises.

Hitting the limit early in the year carries a risk with matching. If your employer calculates the match each pay period and the plan has no year-end “true-up,” your deferrals stop once you reach the limit, and the match stops with them. Spreading contributions evenly across all paychecks avoids leaving match money behind in that situation.

How the IRS sets new limits

The IRS announces the next year’s limits each fall, typically in October or November, using inflation formulas in the tax code. Deferral and catch-up limits move in $500 increments and the total limit in $1,000 increments, so a limit can stay flat in a low-inflation year and then jump once cumulative inflation crosses the next step. That is why the age 60 to 63 catch-up held at $11,250 while the standard catch-up rose by $500.

FAQs

The Bottom Line

Anyone saving in a 401(k) in 2026 should set a payroll election that reaches the higher limits, and workers 50 and older should confirm their plan permits catch-up contributions. Track deferrals yourself after a job change, since excess amounts must come out by April 15 to avoid double taxation. Spreading contributions across every paycheck protects the full employer match when the plan has no year-end true-up.