How Much You Can Contribute to Your 401(k) Each Year

The annual contribution limit for 2024 is $23,500 if you are under 50, or $30,500 if you are 50 or older

The IRS sets a ceiling on how much you can put into your 401(k) each calendar year. For 2024, that limit is $23,500 for workers under age 50. If you are 50 or older, you can contribute an additional $7,500 as a catch-up contribution, bringing your total to $30,500. These limits change most years—the IRS adjusts them for inflation in $500 increments.

Your employer may also contribute to your account through matching or profit-sharing. Those employer contributions count toward a separate, higher limit: $69,000 total per person in 2024 (or $76,500 if you are 50 or older and making catch-up contributions). The $23,500 or $30,500 you contribute yourself is what most people need to track, because that is the part you control.

If you contribute more than the limit in a single year, the IRS treats the excess as a tax error. Your plan administrator will usually catch this and ask your employer to return the overage to you, along with any earnings it generated. The returned amount counts as taxable income for that year, and you may owe a penalty on top of that.

Key Takeaways

• You can contribute up to $23,500 of your own money to a 401(k) in 2024 if you are under 50, or $30,500 if you are 50 or older.
• The IRS raises these limits most years in $500 steps to keep pace with inflation, so check your plan documents or the IRS website each January.
• Employer contributions (matching, profit-sharing, or bonuses) do not count against your personal limit but do count toward a separate $69,000 family ceiling.
• Contributing more than the limit triggers a tax correction, and you will owe income tax plus a possible penalty on the excess.
• If you change jobs mid-year, your new employer's 401(k) has its own limit, and contributions to both plans in the same year stack together toward your total.

How the limit applies when you change jobs

If you leave your job in June and start a new one in August, both employers' 401(k) plans count toward the same annual limit. If you contributed $10,000 to your first employer's plan, you can only put $13,500 more into your new employer's plan for the rest of 2024 (assuming you are under 50). Your plan administrator at the new job will not know what you contributed elsewhere, so you have to track it yourself and tell payroll to stop contributions once you hit the ceiling.

The same rule applies if you work two jobs at the same time. Both employers' plans draw from your single $23,500 limit. Many people in this situation coordinate with payroll at both jobs to split the contribution across the year—for example, $12,000 at Job A and $11,500 at Job B.

Catch-up contributions for workers 50 and older

The extra $7,500 you can contribute after age 50 is called a catch-up contribution. It exists because workers who started saving later in their careers can use it to close the gap. You become may be able to access for catch-up contributions in the year you turn 50, even if your birthday is December 31st.

Your employer's plan must offer catch-up contributions for you to use them—most do, but not all. Check your plan's summary document or ask your benefits administrator. If your plan does not offer catch-ups, you cannot make them, even though the IRS allows them. This is one of the few times an employer can impose a stricter rule than the government requires.

What counts toward your limit and what does not

Only elective deferrals—the money you choose to have withheld from your paycheck—count toward your $23,500 limit. This includes traditional 401(k) contributions and Roth 401(k) contributions if your plan offers both. If you contribute to both types in the same year, the total of both counts as one limit.

Employer matching does not count toward your limit. Neither does employer profit-sharing, bonuses deposited into the plan, or loan repayments. These all go into a separate bucket with a $69,000 ceiling that includes your own contributions. In practice, this means if you max out your $23,500 contribution and your employer adds $15,000 in matching, you are at $38,500 total—still well under the $69,000 family limit.

Rollovers from other retirement accounts (an old 401(k), an IRA, or a 403(b)) do not count toward your contribution limit either. You can roll over any amount without triggering the ceiling.

How to track your contributions across multiple plans

If you have access to more than one 401(k)—through a current job, a side business, or a previous employer's plan that you still contribute to—you must add up all your elective deferrals across every plan. The IRS does not do this math for you. Your payroll department at your main job usually does not know about contributions elsewhere.

The safest approach is to keep a running total yourself. At the start of each year, note the limit ($23,500 or $30,500 for you). Each pay period, add up what you contributed to all plans combined. When you approach the limit, contact payroll and ask them to stop withholding. If you overshoot, you will need to file Form 8606 or work with a tax professional to report the excess and any earnings it generated.

Some employers offer a tool in their benefits portal that shows your year-to-date contributions. This is helpful but not a substitute for your own tracking, especially if you have plans at multiple employers.

What happens if you exceed the limit

If you contribute more than $23,500 (or $30,500 with catch-up) in a single year, the excess is called an excess elective deferral. Your plan administrator should catch this by the end of the year and notify you. The plan will then distribute the excess amount back to you, usually by April 15 of the following year.

When the excess is returned, it counts as taxable income to you in the year you contributed it—not the year you received it back. If you contributed the overage with pre-tax money, you will owe income tax on it. You may also owe a 6% excise tax on the excess amount for each year it remains in the plan uncorrected. This is why catching the error early matters.

If your plan does not catch the error and does not return the excess, you are still responsible for reporting it on your tax return. A tax professional can help you file Form 8606 to correct the situation and minimize penalties.

How limits change year to year

The IRS adjusts the 401(k) contribution limit each January based on inflation. The adjustment happens in $500 increments, so the limit does not change every year—it only moves when inflation has pushed the cost of living up enough to warrant a $500 jump. In recent years, the limit has increased from $19,500 (2020) to $20,500 (2021–2023) to $23,500 (2024).

Your employer's plan documents should be updated by January 1 each year to reflect the new limit. If you are unsure what the current limit is, check the IRS website (irs.gov) or ask your benefits administrator. Many employers send out a memo in December or January reminding employees of the new ceiling.

Frequently Asked Questions

Can I contribute more if my employer does not offer a match?

No. The contribution limit is the same whether your employer matches or not. The limit is set by the IRS and applies to all 401(k) plans. If your employer does not match, you simply have less total money going into the account, but you can still contribute up to $23,500 of your own money.

What if I turn 50 mid-year?

You become may be able to access for catch-up contributions in the year you turn 50. If your birthday is in June, you can contribute the full $7,500 catch-up amount for the rest of that year, even though you were not 50 for the entire year. Coordinate with payroll to adjust your withholding after your birthday.

Do Roth 401(k) contributions count toward the same limit as traditional contributions?

Yes. If your plan offers both Roth and traditional 401(k) options, your combined contributions to both types cannot exceed $23,500 (or $30,500 with catch-up). You cannot contribute $23,500 to traditional and another $23,500 to Roth in the same year.

Can I contribute to a 401(k) and an IRA in the same year?

Yes. A 401(k) contribution limit and an IRA contribution limit are separate. You can max out both in the same year. However, if you have a traditional IRA and a high income, contributing to a 401(k) may affect whether you can deduct IRA contributions on your taxes. A tax professional can advise on your specific situation.

What if my employer's plan has a lower limit than the IRS allows?

Some plans impose their own caps below the IRS limit. If your plan says you can only contribute 10% of your salary and that works out to less than $23,500, you are stuck with the plan's rule. This is rare but does happen with smaller employers. Check your plan summary document to see if a cap is listed.