2018 403(b) Contribution Limit
For 2018, the 403(b) Contribution Limit is $18,500 (Elective deferral limit) and +$6,000 (Catch-up limit, age 50 and over).
Effective 2018-01-01Source: Notice 2017-64 (IRS)Verified 2026-08-29
Compared with 2017
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Elective deferral limit | $18,000 | $18,500 | +$500 (+2.8%) |
| Catch-up limit, age 50 and over | +$6,000 | +$6,000 | +$0 (+0.0%) |
Who it applies to
Employees participating in applicable employer plans subject to the elective deferral limits under section 402(g)
What changed this year, and why
Effective January 1, 2018, the elective deferral limit under section 402(g) of the Internal Revenue Code increased to $18,500. The catch-up contribution limit under section 414(v) for individuals aged 50 or over remained at $6,000.
Common questions
- What is the elective deferral limit in 2018?
- The elective deferral limit is $18,500 for 2018.
- Is there an additional catch-up contribution limit for older participants?
- Yes. Participants age 50 or over by the end of the year may defer an additional $6,000 beyond the regular elective deferral limit.
The other ceiling: total contributions of 100% of pay
The limit on annual additions is one of two ceilings that constrain how much can go into your account in a single year. It applies to the total of all contributions made, including elective deferrals, employer contributions, and any after-tax contributions. For 2018, the limit is the lesser of $55,000 or 100% of your includible compensation for your most recent year of service. This means you cannot contribute more than you earn, regardless of how high the dollar cap might be. The compensation test ensures contributions stay proportional to actual pay. If your includible compensation is less than $55,000, then 100% of that compensation becomes the binding constraint. If your compensation exceeds $55,000, the dollar cap controls instead. The limit applies across all accounts maintained by the same employer, so contributions to multiple accounts with one employer must be added together to ensure the combined total does not exceed the applicable threshold.
The limit on an- nual additions generally is the lesser of: $54,000 for 2017 and $55,000 for 2018, or 100% of your includible compensation for your most recent year of service.
Publication 571 (2018), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
Two limits, and your MAC is the lesser of them
Your Maximum Amount Contributable is determined by calculating two separate limits and taking the lesser of them. The first limit is the limit on annual additions, which applies to total contributions. The second limit is the limit on elective deferrals, which applies to salary reduction contributions. Depending on the type of contributions made to your account, you may need to calculate both limits or only one. If your account receives only employer contributions, your maximum is simply the limit on annual additions. If your account receives only elective deferrals, or a combination of both types, you must figure both limits and your maximum becomes the lesser of the two. Catch-up contributions for participants age 50 or older are calculated separately and are not counted against your maximum. You should figure your maximum at the beginning of each tax year using a conservative estimate of compensation, and refigure if your compensation changes during the year.
Generally, contributions to your 403(b) account are limited to the lesser of: The limit on annual additions, or The limit on elective deferrals.
Publication 571 (2018), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The 15 years of service catch-up almost nobody uses
The 15-year rule is a special catch-up provision for long-term employees of certain qualifying organizations. To be eligible, you must have at least 15 years of service with an educational organization, hospital, home health service agency, health and welfare service agency, church, or convention or association of churches, and the plan must permit it. If you qualify, your elective deferral limit is increased by the least of three amounts calculated based on prior catch-ups and years of service. The rule is rarely used because eligibility requirements are narrow and the calculation is complex. It applies only to elective deferrals under salary reduction agreements, not employer contributions. If you are eligible for both this catch-up and the age 50 catch-up, you must apply this rule first before using the age 50 catch-up. The provision allows certain long-service employees to defer more than the standard elective deferral limit, though the exact increase depends on individual circumstances and prior deferral history.
If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization) and it is allowed by the terms of the plan document, the limit on elective deferrals to your 403(b) ac- count is increased by the least of:
Publication 571 (2018), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The age 50 catch-up sits on top of the limit
Participants who will reach age 50 by the end of the year can make additional catch-up contributions beyond the standard elective deferral limit. This age-based catch-up allows an extra $6,000 in elective deferrals for 2018. To use this provision, your employer's plan must permit catch-up contributions, and you must have already maximized your regular elective deferrals for the year. The catch-up amount cannot exceed the lesser of $6,000 or your compensation minus any non-catch-up elective deferrals made during the year. These additional contributions are not counted against your MAC, meaning your maximum allowable contribution becomes your MAC plus your eligible catch-up amount. If you are eligible for both a service-based catch-up and the age 50 catch-up, you must apply the service-based catch-up first, then apply the age 50 catch-up to any remaining deferral room. The total catch-up contributions across all plans maintained by your employer cannot exceed $6,000 for 2018.
If you will be age 50 or older by the end of the year, you may also be able to make additional catch-up contributions.
Publication 571 (2018), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
What to do when too much went in
When actual contributions to your account exceed your Maximum Amount Contributable, you have an excess contribution that can trigger income tax, additional taxes, and penalties. The IRS distinguishes between two types of excesses: excess annual additions and excess elective deferrals. An excess annual addition occurs when total contributions exceed the limit on annual additions, while an excess elective deferral occurs when salary reduction contributions exceed the deferral limit. To identify an excess, you must refigure your MAC at year-end using your actual compensation and actual contributions made during the year. If your employment status or compensation changes during the year, you should refigure using revised estimates to prevent excesses. Certain excess contributions can be corrected through distributions or by contributing less in later years. The corrective action and tax treatment depend on whether the excess is classified as an excess annual addition or an excess elective deferral.
If your actual contributions (not including catch-up contributions) are greater than your MAC, you have an excess contribution.
Publication 571 (2018), Tax-Sheltered Annuity Plans (403(b) Plans) (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 2017-64 (IRS)
- Elective deferral limit
The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) is increased from $18,000 to $18,500.
- Catch-up limit, age 50 and over
The dollar limitation under § 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over remains unchanged at $6,000.