IRS limits for the 2025 tax year
The IRS sets two separate ceilings: one for the money you defer from your own paycheck, and a higher one for everything that lands in the account, including your employer's match.
Your elective deferral limit covers contributions you elect through payroll, whether you choose pre-tax dollars or Roth. In 2025 you can defer up to $23,500. Age-based catch-up contributions sit on top of that figure if you are 50 or older by the end of the year, and the amount steps higher again between 60 and 63.
Employer matching dollars and any profit-sharing deposits are counted separately. Combined employee and employer money cannot exceed $70,000 in 2025, and only the first $350,000 of pay counts when a match is calculated. Plans can be stricter than the federal maximum, so check your plan document before you set your deferral percentage.
Educational information only. This is not financial, tax, or investment advice, and investing involves risk.
| Limit | Who it applies to | 2025 amount |
|---|---|---|
| Elective deferral | Your own payroll contributions | $23,500 |
| Catch-up | Age 50 to 59 | $7,500 |
| Higher catch-up | Age 60 to 63 | $11,250 |
| Annual additions | You plus your employer, combined | $70,000 |
| Compensation cap | Pay used to calculate a match | $350,000 |
| Highest possible total, age 60 to 63 | $81,250 | |
Next, compare how each dollar is taxed in traditional vs Roth, or run your own numbers in the contribution calculator.
Contribution rules
A 401(k) catch-up contribution is an extra amount you may defer once you reach age 50. It sits on top of the regular elective deferral limit, so your total salary deferral can exceed the standard cap. Adding it is not automatic. You elect it with your plan administrator, and your plan must allow it.
Two age bands matter for 2025. Savers age 50 through 59 may add $7,500 above the standard deferral limit. Under the SECURE 2.0 Act, savers age 60 through 63 may add $11,250 instead. From age 64 onward the amount returns to $7,500. Employer matching contributions do not count toward these figures, and catch-up deferrals follow the same pre-tax or Roth treatment you picked for your regular deferrals.
| Age during the year | Catch-up amount |
|---|---|
| Under 50 | $0 |
| 50 to 59 | $7,500 |
| 60 to 63 | $11,250 |
| 64 and older | $7,500 |
Enrollment usually takes one payroll form or a change inside your recordkeeper's portal. If you are unsure whether your plan permits catch-up deferrals, ask your benefits contact. This page is educational only and is not financial advice.
Amounts follow IRS Notice 2024-80 for tax year 2025. Limits are indexed and may change in later years, so confirm current figures with your plan provider or the IRS.
Contribution Estimator
Adjust salary, deferral rate, and your employer's match formula to see an annual estimate. This is an educational projection, not financial advice.
Estimate assumes a full year of pay.
Tax treatment
Both account types sit inside the same 401(k) plan. The difference is timing. Traditional deferrals come out of pre-tax pay and lower this year's taxable income. Roth deferrals come out of pay you have already been taxed on, and qualified withdrawals later are generally tax free.
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Contributions | Before tax, reducing this year's taxable income | After tax, with no deduction this year |
| Qualified withdrawals | Taxed as ordinary income | Generally tax free after age 59½ and a five-year holding period |
| Income limits | None for employees | None for employees, unlike a Roth IRA |
| Early withdrawals | Taxed, plus a 10% penalty before age 59½ | Taxed at contribution, so the penalty picture depends on earnings versus basis |
| Required distributions | Subject to required minimum distributions at the IRS age threshold | Not subject to required minimum distributions during the owner's lifetime |
| Employer match | Deposited pre-tax | Usually deposited pre-tax, even if your own deferrals are Roth |
Matching dollars are almost always deposited as pre-tax money, so most participant balances end up holding both tax treatments. Your plan document states the exact rule.
The annual ceiling applies to both types together, not to each separately. Check the annual contribution limits, the catch-up contributions rules, and how employer matching fits on top.
Neither side of this comparison carries an income eligibility test for employees, and neither limits lifetime withdrawals. This page is educational only and is not financial advice. Investing involves risk, including possible loss of principal.