2023 403(b) Contribution Limit
For 2023, the 403(b) Contribution Limit is $22,500 (Elective deferral limit) and +$7,500 (Catch-up limit, age 50 and over).
Effective 2023-01-01Source: Notice 2022-55 (IRS)Verified 2026-09-01
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Elective deferral limit | $20,500 | $22,500 | +$2,000 (+9.8%) |
| Catch-up limit, age 50 and over | +$6,500 | +$7,500 | +$1,000 (+15.4%) |
Who it applies to
Employees who participate in employer-sponsored deferred compensation plans subject to the elective deferral limits under section 402(g), including those age 50 and over who are eligible for catch-up contributions under section 414(v).
What changed this year, and why
For 2023, the IRS increased the elective deferral limit under section 402(g) and the catch-up contribution limit under section 414(v) for participants age 50 and over.
Common questions
- What is the elective deferral limit for 2023?
- Effective January 1, 2023, the limitation under section 402(g) on the exclusion for elective deferrals is $22,500, up from $20,500 in 2022.
- Is there an additional catch-up contribution for participants age 50 or over?
- Yes. Under section 414(v), participants who are age 50 or over may contribute an additional $7,500 as a catch-up contribution in 2023, up from $6,500 in 2022.
The other ceiling: total contributions of 100% of pay
The IRS caps the total amount that can be contributed to a 403(b) account each year under the Limit on Annual Additions. This ceiling applies to all contributions combined—elective deferrals, employer nonelective contributions, and after-tax contributions. For 2023, the limit is generally the lesser of $66,000 or 100% of your includible compensation for your most recent year of service. In other words, even if the dollar ceiling is $66,000, your contributions cannot exceed what you actually earned that year. If you maintain more than one 403(b) account with the same employer, the contributions to all of those accounts are added together and measured against a single $66,000 cap. However, if you work for different employers that each sponsor a 403(b) plan, the limits are applied separately to each employer’s plan. The overall Limit on Annual Additions is distinct from the elective deferral limit of $22,500 (plus a $7,500 catch-up contribution for participants age 50 and over), which restricts only your pre-tax and Roth salary deferrals, not the total flow of money into the account.
This is a limit on the total contributions (elective de- ferrals, nonelective contributions, and after-tax contribu- tions) that can be made to your 403(b) account. The limit on annual additions is generally the lesser of: • $61,000 for 2022 and $66,000 for 2023, or • 100% of your includible compensation for your most recent year of service. More than one 403(b) account. If you contrib- uted to more than one 403(b) account, you must combine the contributions made to all 403(b) ac- counts maintained by your employer. If you participate in more than one 403(b) plan maintained by different em- ployers, you don’t need to combine amounts for annual addition limits.
Publication 571 (2023), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
Two limits, and your MAC is the lesser of them
A 403(b) account is subject to two separate ceilings each year: the limit on annual additions and the limit on elective deferrals. Your Maximum Amount Contributable, or MAC, is the lesser of those two figures. If the only money going into your 403(b) comes from salary deferrals, you must calculate both limits and your MAC is the smaller of the two. The annual-additions ceiling covers all contributions—deferrals, after-tax, and employer contributions—while the elective-deferral ceiling applies only to pre-tax or Roth salary reductions. In practice, for most employees whose only contributions are elective deferrals, the $22,500 deferral limit is the binding constraint. However, once employer contributions or after-tax contributions are added, the annual-additions ceiling can become the tighter of the two, capping the total flow into the account regardless of the deferral side.
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 (2023), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The 15 years of service catch-up almost nobody uses
Under the 15-year rule, employees of qualifying organizations who have completed at least 15 years of service may increase their elective deferral limit above the standard amount. To qualify, you must work for 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. The plan document must also permit this catch-up. The increase is the least of three figures: $3,000; $15,000 reduced by the total prior-year catch-ups already used under this rule (counting both pre-tax and designated Roth deferrals); or $5,000 times your years of service minus the total elective deferrals previously made on your behalf. The 15-year rule is sometimes called the "special section 403(b) catch-up" or the "years-of-service catch-up." It is rarely used because its lifetime benefit cap of $15,000 and strict service requirement limit how many employees can take full advantage of it.
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) account is increased by the least of: 1. $3,000; 2. $15,000, reduced by the sum of: a. The additional pre-tax elective deferrals made in prior years because of this rule, plus b. The aggregate amount of designated Roth contri- butions permitted for prior years because of this rule; or 3. $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years.
Publication 571 (2023), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The age 50 catch-up sits on top of the limit
If you will be age 50 or older by the end of the year, the IRS lets you make additional catch-up contributions beyond the standard elective deferral limit. For 2023, the additional catch-up amount is $7,500. Three conditions must be met: you must reach age 50 by December 31, your employer's plan document must allow catch-up contributions, and you must have already maxed out your regular elective deferrals for the plan year. The maximum catch-up contribution is the lesser of $7,500 or the excess of your compensation over the non-catch-up elective deferrals already made. If you qualify for both the service-based catch-up and the age 50 catch-up, amounts are allocated first under the service-based catch-up and then as an age 50 catch-up. Catch-up contributions are not counted against your MAC, so the total that may go into your account equals your MAC plus your allowable catch-up contributions.
If you will be age 50 or older by the end of the year, you may also be able to make additional catch-up contribu- tions. These additional contributions can’t be made with after-tax employee contributions. You are eligible to make catch-up contributions if: • You will have reached age 50 by the end of the year, • Your employer's plan document allows for catch-up contributions, and • The maximum amount of elective deferrals that can be made to your 403(b) account have been made for the plan year.
Publication 571 (2023), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
What to do when too much went in
If your actual contributions (not including catch-up contributions) exceed your MAC, you have made an excess contribution. Excess contributions can result in income tax, additional taxes, and penalties. The effect depends on the type of excess. There are two categories: excess annual additions (contributions exceeding the annual additions limit) and excess elective deferrals (deferrals exceeding the deferral limit). For excess annual additions, the excess amount is included in your income for the year the contributions were made. Certain excess contributions in accounts that invest in mutual funds may also trigger an excise tax. To prevent excess contributions, the IRS recommends refiguring your MAC at year-end or at the start of the next year using your actual compensation and actual contributions made. If your employment status or compensation changes during the year, you should refigure using a revised estimate to stay within limits. Certain excess contributions can be corrected, and the correction method depends on whether the excess is an annual addition or an elective deferral.
If your actual contributions (not including catch-up contri- butions) are greater than your MAC, you have an excess contribution. Excess contributions can result in income tax, additional taxes, and penalties. The effect of excess contributions depends on the type of excess contribution.
Publication 571 (2023), 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 2022-55 (IRS)
- Elective deferral limit
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.
- Catch-up limit, age 50 and over
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.