2025 401(k) Contribution Limit
For 2025, the 401(k) Contribution Limit figures are $23,500 (Elective deferral), +$7,500 (Age 50 catch-up) and +$11,250 (Age 60 through 63 catch-up).
Effective 2025-01-01Source: Notice 2024-80 (IRS)Verified 2026-09-03
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Elective deferral | $23,000 | $23,500 | +$500 (+2.2%) |
| Age 50 catch-up | +$7,500 | +$7,500 | +$0 (+0.0%) |
| Age 60 through 63 catch-up | -1 | +$11,250 | - |
- SECURE 2.0 Act § 109 added § 414(v)(2)(E), a larger catch-up limit for participants who turn 60 through 63 during the year, effective for taxable years beginning after 2024. No earlier year's law had this age band at all
Who it applies to
Employees who participate in a 401(k) plan and make elective salary deferral contributions.
What changed this year, and why
For 2025, the elective deferral limit for 401(k) plans increased to $23,500, up from $23,000 in 2024. The catch-up contribution for participants age 50 or older remains $7,500. A new, higher catch-up of $11,250 applies to participants aged 60 through 63 in 2025.
Common questions
- What is the catch-up contribution amount for workers age 50 or older?
- Workers age 50 or older at any point in 2025 may contribute an additional $7,500 on top of the $23,500 base limit. Those who are aged 60 through 63 in 2025 may contribute an additional $11,250 instead of $7,500.
- How does the 2025 limit compare with the 2024 limit?
- The 2025 limit is $23,500. In 2024, the limit was $23,000.
Every amount on this page is a published figure rather than yours. The 401(k) contribution planner takes the number you enter and works it out against them, showing which published figure it used.
What the limit counts, and the tax it does not save
An elective deferral is the amount a worker chooses to have contributed by an employer to a retirement fund instead of being paid as regular compensation. The IRS treats this set-aside as an employer contribution to a qualified plan. For traditional elective deferrals, the key tax benefit is that the amount is not included in wages subject to federal income tax at the time it is contributed, which reduces current taxable income. However, the deferral is still included in wages subject to social security and Medicare taxes, so payroll taxes are not reduced. Designated Roth contributions are a separate category and do not receive this upfront income tax exclusion. The annual limit on these deferrals applies across all covered retirement plans a worker participates in, and for 2025 that overall limit is $23,500. Workers who are age 50 or older by the end of the tax year may make additional catch-up contributions of $7,500 on top of the base limit.
If you’re covered by certain kinds of retirement plans, you can choose to have part of your com- pensation contributed by your employer to a re- tirement fund, rather than have it paid to you. The amount you set aside (called an elective deferral) is treated as an employer contribution to a qualified plan. An elective deferral, other than a designated Roth contribution (discussed later), isn’t included in wages subject to income tax at the time contributed. However, it’s inclu- ded in wages subject to social security and Medicare taxes.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
One limit across every plan you defer into
The IRS imposes a single annual ceiling on elective deferrals that applies across all retirement plans a worker uses. For 2025, the overall limit on deferrals is $23,500. This ceiling covers contributions to the various types of employer-sponsored retirement plans, including cash or deferred arrangements, the federal Thrift Savings Plan, salary reduction simplified employee pension plans, savings incentive match plans for employees, tax-sheltered annuity plans, certain section plans, and section 457 plans. Each plan has its own specific limit, but amounts deferred under any specific plan limit count as part of the overall limit. The employer or plan administrator is expected to apply the proper annual limit when calculating plan contributions. However, the worker is personally responsible for monitoring the total amount deferred across all plans to ensure deferrals do not exceed the overall limit. If a worker participates in multiple plans, all elective deferrals must be added together and tested against the $23,500 ceiling. Workers age 50 or older may add catch-up contributions of $7,500 to the base limit.
Overall limit on deferrals. For 2025, you shouldn’t have deferred more than a total of $23,500 of contributions to the plans listed in (1) through (3), earlier, unless you are age 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. Your employer or plan administrator should apply the proper annual limit when figuring your plan contributions. However, you’re responsible for monitoring the total you defer to ensure that the deferrals aren’t more than the overall limit.
Publication 525 (2025), 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, your 401(k) plan may let you make catch-up contributions - extra elective deferrals on top of the regular $23,500 annual limit. For 2025, the catch-up limit is $7,500 for section 401(k) plans, as well as 403(b) plans, the Thrift Savings Plan, SAR-SEP plans, and governmental section 457 plans. If you are age 60, 61, 62, or 63 in 2025, the catch-up limit is higher: $11,250. These catch-up amounts are set by the IRS and apply in addition to whatever you are eligible to defer under the standard elective-deferral cap. SIMPLE plans have their own, smaller catch-up amount. Your employer or plan administrator should apply the proper limit when processing contributions, but you are responsible for monitoring the total you defer to make sure you do not exceed the overall limit.
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 2025, 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. The catch-up limit is $11,250 if you are age 60, 61, 62, or 63 in 2025.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
The larger catch-up in the year you turn 60 through 63
A participant who attains age 60, 61, 62 or 63 during the year is allowed a larger catch-up than other catch-up-eligible participants get. For 2025 that larger amount is $11,250 rather than $7,500, and it sits on top of the $23,500 elective deferral limit exactly as the smaller one does. The band is defined by the age reached during the year rather than one held throughout it, so someone who attains 60 in December is inside it for that whole year. Someone past the band is back to the ordinary amount: the larger figure is stated for those ages and no others. A plan is not required to offer it at all, and where the plan does not, the ordinary catch-up applies whatever the participant's age - which is why what payroll will actually take is the plan's answer and not only the notice's.
The catch-up limit is $11,250 if you are age 60, 61, 62, or 63 in 2025.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
What happens if you defer more than the limit
If a worker's total elective deferrals exceed the annual limit, the excess must be reported and removed. The worker is required to notify the plan by the date the plan sets. If the plan allows, the excess amount is distributed back to the worker, and if the worker participates in more than one plan, the excess can be paid out of any plan that permits such distributions. Each plan must be notified by its required date of the specific amount to be paid from that particular plan. The plan must then distribute the excess, along with any income the excess earned while in the account, by April 15 of the year following the year of the deferral. The worker must include the excess deferral in income for the year the deferral was made, reporting it on Form 1040 or 1040-SR by adding it to earned income on line 1h. If the excess is not distributed by the deadline, it remains in the plan and is taxed twice: once when contributed and again when eventually paid out as a distribution, unless the excess was a designated Roth contribution. If the corrective distribution is received by the April 15 deadline, the excess itself is not taxed again in the year received, though any income earned on it is taxable in the year it is taken out.
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. If you participate in more than one plan, you can have the excess paid out of any of the plans that per- mit these distributions. You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. The plan must then pay you the amount of the ex- cess, along with any income earned on that amount, by April 15 of the following year. You must include the excess deferral in your income for the year of the deferral. File Form 1040 or 1040-SR to add the excess deferral amount to earned income on line 1h.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
Roth deferrals count against the same limit
Employers with section 401(k) plans can create qualified Roth contribution programs that allow you to designate part or all of your elective deferrals as after-tax Roth contributions. These designated Roth contributions are treated as elective deferrals for limit purposes, meaning they count against the same $23,500 annual limit that applies to traditional pre-tax deferrals. The key difference is tax treatment: while traditional elective deferrals reduce your taxable income in the year they're made, designated Roth contributions are included in your income when contributed. However, qualified distributions from the Roth account are tax-free in retirement. Your plan must maintain separate accounts and records for designated Roth contributions to track them properly. You can split your contributions between traditional and Roth deferrals in any combination, but the total of all your elective deferrals cannot exceed the annual limit, plus any applicable catch-up contributions if you qualify by age.
Designated Roth contributions. Employers with section 401(k) plans, section 403(b) plans, and governmental section 457 plans can create qualified Roth contribution programs so that you may elect to have part or all of your elective de- ferrals to the plan designated as after-tax Roth contributions. Designated Roth contributions are treated as elective deferrals, except that they’re included in income.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
The window to pull out an excess deferral closes April 15
If you defer more than $23,500 into your 401(k) in 2025, or more than that amount plus the age 50 catch-up, or more than that amount plus the age 60 through 63 catch-up, the excess must be removed from the plan. Once you notify the plan, it must distribute the excess amount along with any income that amount earned no later than April 15 of the year after the deferral was made. If the plan pays the money out by that April 15 date, you do not have to include the distribution in income again when you receive it, because you already reported the excess deferral as income for the year it was made. If you work for more than one employer, you may ask any of your plans to pay out the excess, as long as each plan permits it, but you must tell each plan by the date it sets how much to send from that particular plan. Failing to pull the excess by the April 15 deadline triggers a much harsher result: the money stays in the plan and is taxed a second time when it is eventually withdrawn.
The plan must then pay you the amount of the ex- cess, along with any income earned on that amount, by April 15 of the following year.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
There is no form to file - your employer reports it on your W-2
There is no separate form you file to report your 401(k) contributions. Your employer handles the reporting on your behalf. Your employer generally does not include your elective deferrals in your wages shown in box 1 of Form W-2. Instead, your employer marks the "Retirement plan" checkbox in box 13 of your W-2 and shows the total amount you deferred during the year in box 12. This reporting lets the IRS know you participated in an employer retirement plan, which affects whether you qualify for certain other tax benefits, such as a deduction for a traditional IRA contribution if your income exceeds certain thresholds.
Reporting by employer. Your employer gen- erally shouldn’t include elective deferrals in your wages in box 1 of Form W-2. Instead, your em- ployer should mark the “Retirement plan” checkbox in box 13 and show the total amount deferred in box 12.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
Leave the excess in the plan and it is taxed twice
If you leave an excess deferral in your 401(k) plan instead of having it distributed, you face double taxation. You already included the excess deferral in your income for the year you made it, so you cannot also treat it as a tax-free return of basis. When you eventually withdraw the money from the plan, the full amount is taxed again as ordinary income. This means the excess deferral is taxed twice: once when you contribute it and again when you receive it as a distribution. The only exception is if the excess deferral was a designated Roth contribution, which is already after-tax money. To avoid this double taxation, you must have the excess amount distributed from the plan by April 15 of the following year.
Excess not distributed. If you don’t take out the excess amount, you can’t include it in the cost of the contract even though you inclu- ded it in your income. Therefore, you’re taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution (unless the excess deferral was a designated Roth contri- bution).
Publication 525 (2025), 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 2024-80 (IRS)
- Elective deferral
The limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3), which includes elective deferrals made to the Thrift Savings Plan, is increased from $23,000 to $23,500.
- Age 50 catch-up
The 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) that generally applies for individuals aged 50 or over remains $7,500.
- Age 60 through 63 catch-up
The limitation under section 414(v)(2)(E)(i) for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) that applies for individuals who attain age 60, 61, 62, or 63 in 2025 is $11,250.