401(k) Contribution Calculator
Find out exactly how much you and your employer contribute to your 401(k) each year. Use it when evaluating a new job offer or deciding how much of your paycheck to defer.
About this calculator
A 401(k) contribution has two parts: your own deferral and any employer match. Your annual contribution equals your salary multiplied by your chosen contribution percentage. The employer match is a percentage of your contribution, but it is capped at a maximum percentage of your salary. The combined formula is: total = (salary × contrib%) + min(salary × contrib% × employerMatch%, salary × matchLimit%). For example, if your employer matches 50% of contributions but only up to 6% of salary, contributing 10% still only earns you a match worth 3% of salary. Understanding this formula helps you pinpoint the exact contribution rate needed to capture every dollar of free employer money. Pre-tax contributions also reduce your taxable income, so your effective cost is lower than the nominal dollar amount deferred.
How to use
Suppose your annual salary is $80,000, you contribute 8%, your employer matches 50% of your contribution, and the match is capped at 5% of salary. Your contribution: $80,000 × 8% = $6,400. Employer match: $80,000 × 8% × 50% = $3,200, but the cap is $80,000 × 5% = $4,000. Since $3,200 < $4,000 the full match applies. Total annual 401(k) addition = $6,400 + $3,200 = $9,600. If you are in the 22% tax bracket, your $6,400 deferral saves roughly $1,408 in federal taxes, making your real out-of-pocket cost only $4,992.
Frequently asked questions
How much should I contribute to my 401(k) to get the full employer match?
You need to contribute at least enough to reach the employer's match cap, expressed as a percentage of your salary. For example, if your employer matches 100% of contributions up to 4% of salary, contributing exactly 4% captures every dollar of the match. Contributing less leaves free money on the table, while contributing more still grows tax-deferred but earns no additional match beyond the cap. Always check your plan documents for the exact match formula and vesting schedule before deciding.
What is the IRS 401(k) contribution limit for 2024?
For 2024 the IRS sets the employee elective deferral limit at $23,000, up from $22,500 in 2023. Workers aged 50 and older may make an additional catch-up contribution of $7,500, bringing their total to $30,500. These limits apply to traditional and Roth 401(k) accounts combined. Employer matching contributions do not count toward the employee limit but do count toward the overall combined limit of $69,000 (or $76,500 with catch-up).
How does a 401(k) pre-tax contribution reduce my taxable income?
When you make a traditional 401(k) contribution, the deferred amount is excluded from your W-2 taxable wages for federal income tax purposes, though it is still subject to FICA taxes. If you earn $70,000 and defer $7,000, you are taxed on only $63,000 of ordinary income. In a 22% bracket that saves $1,540 in federal income tax for the year. The tax savings effectively reduces your real cost of saving, making each dollar contributed cost you less than a dollar out of your take-home pay.