401(k) Contribution Limits for 2023 vs. 2024

The 2023 401(k) contribution limit for employees was $22,500. For 2024, employees may contribute up to $23,000.

If your employer offers a 401(k) plan, try to make the most of it because it can be one of the easiest and most effective ways to save for your retirement.

But while a major advantage of 401(k) plans is that they let you put a portion of your pay into your retirement account automatically, there are limits to how much you may contribute.

Each year, usually in October or November, the Internal Revenue Service (IRS) reviews and sometimes adjusts the maximum contribution limits for 401(k) plans, individual retirement accounts (IRAs), and other retirement savings vehicles. In November 2023, the IRS issued updates for 2024.

Basic Limits

The basic employee contribution limit for 2024 is $23,000 ($22,500 for 2023). This limit includes all elective employee salary deferrals and any contributions made to a designated Roth account within your 401(k) or to a Roth 401(k) plan. 

If you are over age 50, the catch-up contribution remains the same as for 2023, at $7,500. That's a total of $30,500 (vs. $30,000 in 2023.)

The same contribution limits apply to 403(b) plans and most 457 plans, as well as to the federal government’s Thrift Savings Plan.

If you have multiple 401(k) accounts, your total contributions to all of them—both traditional and Roth—cannot exceed that $23,000 limit. Any contributions you make to other types of retirement accounts, such as IRAs, do not affect your 401(k) contribution limit.

After-Tax Contributions

If you have extra funds to sock away and your company offers an after-tax 401(k) contribution option, you can contribute more. In 2024, the total combined limit, including elective employee deferrals, after-tax contributions, and employer matching funds, is $69,000 (or $76,500 if you're 50 or older). In 2023, the limit was $66,000 ($73,500 for those 50 or older).

Employer Contributions

Another big benefit of participating in a 401(k) plan is that your employer may contribute to it on your behalf. Many employers match employee contributions by adding, for example, 50 cents or $1 for every dollar the employee contributes.

Employers can also make elective contributions regardless of how much or little the employee contributes, up to certain limits. The limit on total employer and employee contributions for 2024 is $69,000. When you include the $7,500 catch-up contribution, that limit becomes $76,500.

The general limit on total employer and employee contributions for 2023 was $66,000 or 100% of employee compensation, whichever was less. For workers who were age 50 and up, the base limit was $73,500, which included the $7,500 catch-up contribution.

Limits for Highly Paid Employees

If you earn a very high salary, you may be considered a highly compensated employee (HCE), subject to more stringent contribution limits. To prevent wealthier employees from benefiting unfairly from the tax benefits of 401(k) plans, the IRS uses the actual deferral percentage (ADP) test to ensure that employees of all compensation levels participate proportionately in their companies' plans.

If non-highly compensated employees (NHCEs) do not participate in the company plan, the amount that HCEs can contribute may be restricted.

Contributions in Excess of Annual Limits

Evaluating your estimated contributions for the year ahead and analyzing your contributions at the end of a calendar year can be very important. If you find that you have made contributions in excess of the annual limits, the IRS requires that these excess deferrals be returned to you by April 15.

Comparing 2024 and 2023 Limits

The chart below provides a breakdown of how the rules and limits for defined-contribution plans (401(k), 403(b), and most 457 plans) changed for 2024 vs. 2023.

^{* The catch-up contribution limit for participants age 50 or older is available to those turning 50 at any time during the year. For instance, if you were born on New Year's Eve, it applies.}

The Bottom Line

Every year, the Internal Revenue Service (IRS) issues updates for the maximum amount of money employees may contribute to their 401(k) plans.

For 2024, that amount is $23,000, with a catch-up contribution of $7,500 for those aged 50 and over. For 2023, the maximum contribution amounts were $22,500 and $7,500 for catch-up contributions.

Make the most of your yearly opportunity to save toward retirement by maxing out your contribution amounts, if possible. Moreover, be sure to take advantage of employer-matching contributions, if they're offered, to boost your retirement savings each year.