2021 403(b) Contribution Limit
For 2021, the 403(b) Contribution Limit is $19,500 (Elective deferral limit) and +$6,500 (Catch-up limit, age 50 and over).
Effective 2021-01-01Source: Notice 2020-79 (IRS)Verified 2026-08-29
Compared with 2020
Every figure on this page is unchanged from 2020.
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Elective deferral limit | $19,500 | $19,500 | +$0 (+0.0%) |
| Catch-up limit, age 50 and over | +$6,500 | +$6,500 | +$0 (+0.0%) |
Who it applies to
Employees who participate in tax-sheltered annuity plans under section 403(b)
What changed this year, and why
For 2021, the IRS kept the elective deferral limit and the catch-up contribution limit unchanged from 2020.
Common questions
- What is the elective deferral limit for 2021?
- The elective deferral limit under section 402(g) is $19,500 for 2021, unchanged from 2020.
- Is there a catch-up contribution provision for older workers?
- Yes. Participants aged 50 or over may contribute an additional $6,500 as a catch-up contribution in 2021, unchanged from 2020.
The other ceiling: total contributions of 100% of pay
The limit on annual additions is the first of two ceilings that cap what can go into the account in a single year. It counts every dollar that flows in: salary-reduction deferrals, employer nonelective contributions, and any after-tax money you put in. For 2021 the hard cap is $58,000, but that number only matters if your pay is high enough to absorb it. The rule also says the limit is 100% of your includible compensation for your most recent year of service, so even a highly paid employee cannot have more contributed than he or she actually earned from the employer maintaining the account. Whichever of the two figures is smaller becomes the effective ceiling. If you work for more than one employer with separate plans, you do not add the accounts together for this test, but contributions to multiple accounts run by the same employer must be combined. Ministers and church employees may be subject to different aggregation rules, but the basic ceiling still runs through the same two-part test.
The limit on an- nual additions is generally the lesser of: • $57,000 for 2020 and $58,000 for 2021, or • 100% of your includible compensation for your most recent year of service.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
Two limits, and your MAC is the lesser of them
Your Maximum Amount Contributable (MAC) is the overall ceiling on contributions to your account each year. Your MAC is determined by both a limit on annual additions and a limit on elective deferrals, and it equals the lesser of them. The limit on elective deferrals is $19,500. The limit on annual additions is a separate cap based on your includible compensation for your most recent year of service. If your only contributions are elective deferrals, your MAC is the lesser of $19,500 or the annual additions limit. If both elective deferrals and employer nonelective contributions are made, you must calculate both limits and your MAC is the smaller result. Catch-up contributions of $6,500 for eligible participants sit on top of your MAC and are not counted against it.
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 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The 15 years of service catch-up almost nobody uses
This special catch-up provision serves employees of qualifying organizations including public and private schools, hospitals, home health service agencies, health and welfare service agencies, churches, and conventions or associations of churches. If you have at least 15 years of service with such an organization and your plan allows it, your elective deferral limit can be increased beyond $19,500. The increase equals the smallest of: $3,000; $15,000 minus prior catch-up amounts used under this rule; or a third calculation involving your total years of service and all prior elective deferrals. Despite being available, this provision is rarely used because the separate additional catch-up of $6,500 for older participants often provides a simpler and equally beneficial path. If you qualify for both this rule and the age-based catch-up, amounts are allocated first under this rule, then the remainder goes to the age-based catch-up.
15-Year Rule 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: 1. $3,000; 2. $15,000, reduced by the sum of:
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The age 50 catch-up sits on top of the limit
Participants who qualify for the catch-up can contribute above the regular $19,500 elective-deferral limit. For 2021 the maximum catch-up amount is the lesser of $6,500 or the excess of your compensation for the year over your non-catch-up elective deferrals. Your plan must allow catch-up contributions, and you must have already contributed the maximum $19,500 through salary reduction before any catch-up amounts can be added. These additional contributions are not counted against your MAC, so the total you can have contributed equals your MAC plus your allowable catch-up amount. If your employer maintains multiple plans for you, the total catch-up across all of them cannot exceed $6,500 for 2021. When more than one catch-up provision applies, the rules specify an ordering that must be followed before any amounts can be treated as catch-up contributions.
The maximum amount of catch-up contributions is the lesser of: • $6,500 for 2020 and 2021; or • The excess of your compensation for the year, over the elective deferrals that aren’t catch-up contributions.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
What to do when too much went in
If the actual contributions to your account (excluding catch-up contributions) exceed your Maximum Amount Contributable, you have an excess contribution. Excess contributions can result in income tax, additional taxes, and penalties depending on the type. There are two categories: excess annual additions and excess elective deferrals. An excess annual addition occurs when total contributions exceed the limit on annual additions. An excess elective deferral occurs when your salary reduction deferrals exceed the limit on elective deferrals. The IRS requires you to identify which type of excess you have, because the correction method and tax consequences differ. At the end of the year or beginning of the next, you should refigure your MAC using your actual compensation and actual contributions. If your employment status or compensation changes during the year, you should refigure your MAC with a revised estimate to prevent excess contributions from occurring in the first place. Certain excess contributions can be corrected if identified and handled properly.
If the actual contributions (not including catch-up contributions) to your account are greater than your MAC, you have excess contri- butions.
Publication 571 (2021), 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 2020-79 (IRS)
- Elective deferral limit
The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) remains unchanged at $19,500.
- 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 $6,500.