Maximum 401(k) Contribution
The maximum 401(k) contribution for 2025 is $23,500 for workers under age 50. For those 50 and older, the limit rises to $31,000 with a $7,500 catch-up contribution. These caps are set by the IRS each year and apply to elective deferrals from your paycheck, not to employer matches.
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2025 vs. 2024 Limits
| Category | 2024 | 2025 |
|---|---|---|
| Base employee deferral limit | $23,000 | $23,500 |
| Catch-up (age 50+) | $7,500 | $7,500 |
| Total max with catch-up | $30,500 | $31,000 |
| Overall plan limit (employee + employer) | $69,000 | $70,000 |
Who Can Contribute the Maximum
Anyone with earned income can contribute up to the base limit, regardless of income level. The $7,500 catch-up is available only to participants who are age 50 or older by the end of the calendar year. If you work for multiple employers, the combined deferrals across all plans cannot exceed the annual limit.
What Counts Toward the Limit
Only your own elective deferrals count toward the $23,500 cap. Employer matching contributions, employer nonelective contributions, and plan forfeiture allocations do not count against your personal limit but do count toward the overall plan limit of $70,000 for 2025. Pre-tax and Roth contributions share the same $23,500 bucket.
What Happens If You Overcontribute
Excess contributions are taxed at 6% per year until they are withdrawn or corrected. The IRS requires you to file an amended return or request a correction by your tax filing deadline to avoid the penalty. If you are unsure whether you have exceeded the limit, contact your plan administrator for a year-end reconciliation.
Why the Limits Change
The IRS adjusts 401(k) limits annually based on inflation. The 2025 increase of $500 from 2024 reflects modest wage growth. If inflation accelerates, future years could see larger jumps. Workers who max out their contributions should check each year's limit when planning payroll deductions.