2023 401(k) Contribution Limit
For 2023, the 401(k) Contribution Limit is $22,500 (Elective deferral) and +$7,500 (Age 50 catch-up).
Effective 2023-01-01Source: Notice 2022-55 (IRS)Verified 2026-09-01
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Elective deferral | $20,500 | $22,500 | +$2,000 (+9.8%) |
| Age 50 catch-up | +$6,500 | +$7,500 | +$1,000 (+15.4%) |
Who it applies to
Employees who participate in employer-sponsored retirement plans subject to the elective deferral limits of Section 402(g), including plans described in Section 401(k)(11), Section 403(b), governmental Section 457(b) plans, and the Thrift Savings Plan. The catch-up provision under Section 414(v) applies to participants who are age 50 or older by the end of the calendar year.
What changed this year, and why
Effective January 1, 2023, the elective deferral limit under Section 402(g)(1) increased to $22,500. The catch-up contribution limit for participants aged 50 or older under Section 414(v)(2)(B)(i) increased to $7,500. Both amounts were raised from the prior year's levels to reflect cost-of-living adjustments under Section 415(d).
Common questions
- What is the elective deferral limit for 2023?
- The elective deferral limit for 2023 is $22,500, as set by the IRS under Section 402(g)(1). This is the maximum amount an employee may contribute through salary deferral across all applicable employer plans.
- How much extra can someone age 50 or older contribute in 2023?
- Participants aged 50 or older may make an additional catch-up contribution of $7,500 under Section 414(v)(2)(B)(i) on top of the regular deferral limit.
What the limit counts, and the tax it does not save
An elective deferral is the amount you choose to have your employer contribute to a retirement fund instead of paying to you directly. The key tax benefit is that the deferral isn't included in wages subject to income tax at the time it is contributed, which lowers your current taxable pay. However, the amount is still included in wages subject to social security and Medicare taxes, so those payroll taxes are still owed on the full sum. A designated Roth contribution does not receive this income-tax exclusion because it is made on an after-tax basis. The deferred money grows inside the plan, and you pay ordinary income tax when you eventually withdraw it. The $22,500 annual limit applies to the total of these pre-tax deferrals across all of the plans listed in this section. If you are age 50 or older by the end of the year, an additional $7,500 catch-up amount may also be deferred on top of the basic limit.
isn't included in wages subject to income
Publication 525 (2023), Taxable and Nontaxable Income (IRS)
One limit across every plan you defer into
For 2023, the overall limit on elective deferrals across all of the retirement plans covered by this section is $22,500. This cap is not applied separately to each plan you participate in; instead, every salary-reduction deferral you make during the year is added together, and the combined total must not exceed the limit. If you work for more than one employer, or you contribute to multiple plans, each deferral counts toward the same single $22,500 ceiling. The specific dollar limits that apply to individual plans are discussed separately in the publication, but any amount deferred under those specific plan limits still counts toward the overall limit. If you are age 50 or older by the end of the tax year, you may add the $7,500 catch-up amount on top of the $22,500 basic limit.
Overall limit on deferrals. For 2023, you shouldn't have deferred more than a total of $22,500 of contributions to the plans listed in (1) through (3), earlier, unless you are 50 or older. The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later. Amounts deferred under specific plan limits are part of the overall limit on deferrals.
Publication 525 (2023), Taxable and Nontaxable Income (IRS)
The catch-up once you are old enough for it
If you are age 50 or older by the end of your tax year, the IRS lets you defer more than the regular $22,500 elective-deferral limit into your 401(k). The extra amount is called a catch-up contribution. For 2023, the catch-up limit for 401(k) plans is $7,500, which you may add on top of the regular limit. Your employer or plan administrator should apply the proper annual limit when processing contributions, but you are responsible for monitoring the total you defer to make sure it does not exceed the overall limit. Catch-up contributions are treated as additional elective deferrals subject to the section 401(k) rules. The same $7,500 figure also applies to 403(b) plans, the TSP, SAR-SEP plans, and governmental section 457 plans. For SIMPLE plans, the catch-up amount is different. The catch-up provision is intended to help workers who are closer to retirement build up their savings in the years before they stop working.
Catch-up contributions. You may be allowed catch-up contributions (additional elective de- ferrals) if you're age 50 or older by the end of your tax year. For 2023, the catch-up limit for section 401(k) and 403(b) plans, the TSP, SAR- SEP plans, and governmental section 457 plans is $7,500.
Publication 525 (2023), Taxable and Nontaxable Income (IRS)
What happens if you defer more than the limit
If the total amount you defer during the year exceeds the annual limit, the excess is called an excess deferral. You are required to notify your plan by the date the plan specifies so that the excess can be corrected. If the plan allows, the excess amount will be distributed back to you, and if you participate in more than one plan, you may choose which plan pays out the excess, provided that plan permits these distributions. The plan must distribute the excess, plus any income earned on it, by April 15 of the following year. You must include the excess deferral in your income for the year it was made, even though it was originally excluded from wages when contributed. If you do not remove the excess by the deadline, it remains in the plan and is taxed a second time when eventually distributed, unless it was a designated Roth contribution that was already taxed. Failure to distribute the excess by April 15 results in double taxation on the same amount.
Excess deferrals. If your deferrals exceed the limit, you must notify your plan by the date re- quired by the plan. If the plan permits, the ex- cess amount will be distributed to you.
Publication 525 (2023), Taxable and Nontaxable Income (IRS)
Roth deferrals count against the same limit
Designated Roth contributions are elective deferrals that you elect to treat as after-tax Roth contributions rather than as pre-tax deferrals. Although they are designated Roth contributions, they are still treated as elective deferrals for purposes of the annual limit. This means that every dollar you contribute as a designated Roth deferral counts toward the same $22,500 overall ceiling that applies to all of your elective deferrals combined. The difference is in the timing of the tax: a designated Roth contribution is included in your wages in the year it is made, so you pay income tax on it now, rather than when you later receive a distribution. Employers with section 401(k) plans, section 403(b) plans, and governmental section 457 plans may offer a qualified Roth contribution program that lets you split your deferrals between pre-tax and designated Roth amounts, but the sum of both parts cannot exceed the $22,500 limit, plus any $7,500 catch-up amount if you are age 50 or older.
Designated Roth contributions. These contributions are elective deferrals but are inclu- ded in your wages in Form W-2, box 1.
Publication 525 (2023), Taxable and Nontaxable Income (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Notice 2022-55 (IRS)
- Elective deferral
The limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3) is increased from $20,500 to $22,500.
- Age 50 catch-up
The dollar limitation under section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) for individuals aged 50 or over is increased from $6,500 to $7,500.