The 401(k) contribution limits for 2026 let you defer up to $24,500 of your own pay into the plan, with an extra $8,000 catch-up if you’re 50 or older and $11,250 if you’re age 60 through 63.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 That cap covers only the money you redirect from your paycheck. Anything your employer adds through matching or profit-sharing sits under a separate, larger ceiling.
The Standard Employee Deferral Cap
For 2026, you can defer $24,500 into a 401(k) across the tax year. It applies whether you send the money to a traditional pre-tax account, a designated Roth account, or split it between the two.
A second, less-noticed cap limits the amount of your pay the plan is allowed to consider when calculating percentage-based contributions. That figure is $360,000 for 2026.2Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs It mostly affects very high earners whose percentage election would otherwise blow past the dollar limit.
Catch-Up Contributions at 50 and Older
Turn 50 or older by December 31, 2026, and you can add $8,000 on top of the $24,500 standard limit, for a total employee deferral of $32,500.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Your regular deferrals have to reach $24,500 before any further amounts are treated as catch-up contributions.3Internal Revenue Service. Retirement Topics – Catch-Up Contributions
The Enhanced Catch-Up for Ages 60 Through 63
The SECURE 2.0 Act created a higher catch-up window for participants who turn 60, 61, 62, or 63 during the tax year. For 2026, that enhanced limit is $11,250 in place of the standard $8,000, which pushes the maximum employee deferral to $35,750.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Once you turn 64, you drop back to $8,000. The enhanced tier is indexed for inflation going forward.4Office of the Law Revision Counsel. 26 USC 414 – Definitions and Special Rules
Employers are not required to offer the enhanced tier. A plan may hold every catch-up-eligible participant to $8,000 regardless of age, so check your plan document if you’re in the 60-to-63 range.
Mandatory Roth Treatment for High Earners
This is the change that has caught the most people off guard. Beginning in 2026, if your FICA wages from a given employer exceeded $150,000 in the prior year, any catch-up contributions you make to that employer’s plan have to go into a designated Roth account.5Federal Register. Catch-Up Contributions You lose the pre-tax option on that portion. The wage figure that matters is your Social Security wages in Box 3 of your W-2, not Medicare wages or total compensation.
High earners still get to make catch-ups, they just forgo the upfront deduction. The tradeoff: qualified Roth withdrawals in retirement come out tax-free. If your plan does not offer a Roth option, it cannot accept catch-up contributions from participants over the threshold at all. The base threshold of $145,000 is indexed for inflation, so it will keep drifting up.
Employer Contributions and the Combined Ceiling
Your $24,500 deferral limit is only one piece. A separate, larger cap governs everything credited to your account in a year, including your deferrals, employer matching, profit-sharing, and forfeiture allocations. For 2026, that combined ceiling is $72,000.2Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
Catch-up contributions sit outside that ceiling. So a worker 50 or older could see up to $80,000 flow into the account in a year ($72,000 plus $8,000), and someone in the 60-to-63 window could reach $83,250. Most employees never approach $72,000 because it requires a very generous employer contribution on top of a maxed-out deferral. It becomes relevant mostly for business owners, professional firm partners, and employees at companies with large profit-sharing plans.
If You Contribute to More Than One Plan
The $24,500 employee deferral limit is a single combined cap across every 401(k), 403(b), SIMPLE, and SARSEP plan you participate in during the year.6Internal Revenue Service. How Much Salary Can You Defer if You’re Eligible for More Than One Retirement Plan Put $15,000 into one employer’s 401(k) and you have $9,500 left for any other plan that same year. Job changes mid-year are the usual way people accidentally cross the line.
Governmental 457(b) plans are the exception. A 457(b) has its own separate $24,500 limit, and the two do not combine. A worker with both plans could defer up to $49,000 in 2026 before catch-up contributions, a situation that comes up most often for government employees and university staff.6Internal Revenue Service. How Much Salary Can You Defer if You’re Eligible for More Than One Retirement Plan
Traditional or Roth Within the Same Limit
Every dollar of deferral is either traditional pre-tax or designated Roth. Traditional deferrals come out before federal income tax is calculated, lowering your taxable wages for the year, and every dollar you eventually withdraw is taxed as ordinary income.7Office of the Law Revision Counsel. 26 USC 402A – Optional Treatment of Elective Deferrals as Designated Roth Contributions Roth deferrals work the other way: you pay tax now, and qualified retirement withdrawals, including all growth, come out tax-free.
Both count equally against the $24,500 cap, and you can split contributions between them in any proportion your plan allows. Neither choice affects Social Security or Medicare tax withholding, which apply to the full paycheck regardless.
What Happens If You Go Over
Cross the $24,500 line and you have until April 15 of the following year to pull the excess (plus any earnings) back out of the plan.8Internal Revenue Service. 401(k) Plan Fix-It Guide – Elective Deferrals Weren’t Limited to the Amounts Under IRC Section 402(g) Corrected on time, the excess is taxable in the year you originally deferred it, the earnings are taxable in the year they’re distributed, and no early withdrawal penalty applies. The plan does not have to withhold 20% or obtain spousal consent for the corrective distribution.
Miss the April 15 deadline and the same dollars get taxed twice, once in the year of deferral and again when you eventually withdraw them. The distribution may also trigger the 10% early withdrawal penalty and 20% mandatory withholding. If you changed employers during the year, add up your combined deferrals before December 31.
Why Highly Compensated Employees May Be Capped Lower
Even though the statute allows a $24,500 deferral, plans have to pass the Actual Deferral Percentage test each year, which compares the average deferral rate of highly compensated employees to the rate for everyone else.9Internal Revenue Service. 401(k) Plan Fix-It Guide – The Plan Failed the 401(k) ADP and ACP Nondiscrimination Tests You count as a highly compensated employee if you owned more than 5% of the business at any point in the current or prior year, or if you earned more than $160,000 from the employer in the prior year.2Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
When rank-and-file employees defer at low rates, the test forces the plan to cap what the highly compensated employees can put in. Fail the test and the excess deferrals get refunded and treated as taxable income in the year they were originally deferred. Small business owners often see their own contributions held well below $24,500 for this reason.
Many employers sidestep the problem by adopting a safe harbor plan. The common versions require the employer to either match 100% of the first 3% of pay deferred plus 50% of the next 2%, or make a flat 3% nonelective contribution to every eligible employee. In exchange, the plan automatically passes the ADP test and highly compensated employees can defer up to the full limit.
The Saver’s Credit for Lower-Income Contributors
If your income is modest, your 401(k) contributions may earn you a tax credit worth 50%, 20%, or 10% of the amount contributed, up to $2,000 per person or $4,000 for married couples filing jointly.2Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs For 2026, the maximum 50% credit applies at adjusted gross incomes up to $48,500 for joint filers, $36,375 for head of household, and $24,250 for single filers. The credit phases out entirely above $80,500 (joint), $60,375 (head of household), and $40,250 (single).
The Saver’s Credit is scheduled to be replaced starting in 2027 by a “Saver’s Match” that the federal government deposits directly into your retirement account rather than reducing your tax bill.10Congressional Research Service. The Retirement Savings Contribution Credit and the Saver’s Match For 2026, the current credit structure still applies and eligible workers should claim it on their return.