2024 457(b) Contribution Limit
The 2024 457(b) Contribution Limit is $23,000.
Effective 2024-01-01Source: Notice 2023-75 (IRS)Verified 2026-08-29
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Deferral limit | $22,500 | $23,000 | +$500 (+2.2%) |
Who it applies to
Participants in eligible deferred compensation plans under section 457 maintained by state and local governments or tax-exempt organizations.
What changed this year, and why
Under section 457(e)(15) of the Internal Revenue Code, the annual deferral limit for eligible deferred compensation plans of state and local governments and tax-exempt organizations increased to $23,000, effective January 1, 2024. The prior-year limit was lower.
Common questions
- Who is subject to this deferral limit?
- The limit applies to eligible deferred compensation plans maintained under section 457 of the Internal Revenue Code by state and local governments or tax-exempt organizations.
- How does the 2024 limit compare to prior years?
- The prior-year limit was lower. The 2024 limit reflects the annual cost-of-living adjustment published in IRS Notice 2023-75.
Every amount on this page is a published figure rather than yours. The 457(b) contribution headroom takes the number you enter and works it out against them, showing which published figure it used.
Your limit is the lesser of the dollar cap and your includible compensation
For 2024, the maximum amount you may defer into a section 457 plan is $23,000, but only if your includible compensation for the year is at least that much. If you earned less than the cap, your deferral limit is restricted to what you actually earned - you cannot defer more than your includible compensation even though the dollar ceiling is higher. Includible compensation is generally your Form W-2 wages plus any elective deferrals already made for the year. It covers salaries, fees, bonuses, commissions, tips, certain fringe benefits, and employer contributions to other deferred compensation arrangements such as qualified retirement plans, SIMPLE plans, cafeteria plans, and tax-sheltered annuities. Employers may alternatively measure includible compensation using wages subject to income-tax withholding, wages reported on Form W-2, or wages subject to social-security withholding. The rule applies to participants in section 457 plans, which are deferred-compensation arrangements maintained by state or local governments and tax-exempt organizations. This cap is coordinated with the overall elective-deferral limit that applies across all of a participant's plans, so deferrals under a section 457 count toward that aggregate ceiling.
Limit for deferrals under section 457 plans. If you're a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt organ- izations), you should have deferred no more than the lesser of your includible compensation or $23,000 in 2024.
Publication 525 (2024), Taxable and Nontaxable Income (IRS)
The special catch-up in the last 3 years before normal retirement age
In the three calendar years ending immediately before you reach the plan's normal retirement age, a deferred compensation plan may offer a special catch-up that lets you defer more than the regular annual cap. For 2024, the catch-up limit is the lesser of two calculations. The first is twice the basic annual limit, which is $46,000 for 2024. The second is the basic annual limit for 2024 plus the portion of the basic limit that went unused in all earlier years of participation in the plan - but this second option is available only if you are not also using the age-50-or-over catch-up contributions described separately. You must compare the two results and take the lower one; you cannot simply add unused amounts on top of the doubled figure. The catch-up is per-plan and not automatic, so the plan document must specifically provide for it. Participants who are both within three years of normal retirement age and age 50 or older must choose which catch-up produces the higher deferral room, because the two provisions cannot be combined.
Increased limit. During any, or all, of the last 3 years ending before you reach normal re- tirement age under the plan, your plan may pro- vide that your limit is the lesser of: 1. Twice the annual limit ($46,000 for 2024), or 2. The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50-or-over catch-up contributions).
Publication 525 (2024), Taxable and Nontaxable Income (IRS)
The age 50 catch-up, and who can use it
Participants in a governmental section 457 plan who are at least 50 years old may make additional catch-up deferrals on top of the regular annual limit, provided two conditions are met. First, you must have reached age 50 by the end of the calendar year. Second, no other elective deferrals can be made for you to the plan for the year because of limits or restrictions - meaning you must already be maxing out under another provision, such as a plan-imposed cap or the includible-compensation ceiling, before the age-50 catch-up can apply. If you satisfy both conditions, your deferral ceiling for 2024 becomes the lesser of your includible compensation or $23,000, plus an additional $7,500. The catch-up is available only through governmental 457 plans; employees of tax-exempt organizations under section 457(b) do not have access to this provision. If you are also within three years of the plan's normal retirement age and the plan offers the separate three-year catch-up, that alternative limit may be higher, but the two cannot be stacked - you must use whichever produces the greater deferral room for the year.
Catch-up contributions. You can gener- ally have additional elective deferrals made to your governmental section 457 plan if: • You reached age 50 by the end of the year, and • No other elective deferrals can be made for you to the plan for the year because of lim- its or restrictions. If you qualify, your limit can be the lesser of your includible compensation or $23,000, plus $7,500.
Publication 525 (2024), 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 2023-75 (IRS)
- Deferral limit
The limitation on deferrals under section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $22,500 to $23,000.