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Max compensation for 401k 20218/7/2023 Although Mary earned $360,000, your plan can only use up to $280,000 of her compensation when applying the matching formula for 2019. If your plan provides for matching contributions, you must follow the plan’s match formula.Įxample: Your plan requires a match of 50% on salary deferrals that do not exceed 5% of compensation. ![]() Mary may contribute to the plan until she reaches her annual deferral limit of $19,000 even though her compensation will exceed the annual limit of $280,000 in October. ![]() total employee and employer contributions (including forfeitures) - the lesser of 100% of an employee’s compensation or $66,0 ($61,0 $58,0 not including "catch-up" elective deferrals of $7,500 in 2023 $6,500 in 20 for employees age 50 or older) (IRC section 415(c))Įxample: Mary, age 49, whose annual compensation is $360,000 ($30,000 per month), elects to defer $1,500 per calendar month, up to $19,000 for the 2019 year. ![]() Unless your plan terms provide otherwise, the salary (elective) deferral limit is applied uniformly to the compensation that the employee receives throughout the year.Ĭompensation and contribution limits are subject to annual cost-of-living adjustments.
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