Employer Match
An employer match is the money your company adds to your 401(k) when you put in your own. It is not a bonus, and it is not automatic in every plan. You have to contribute part of your pay first.
Most plans describe the match as a percentage of your pay, capped at a percentage of your contributions. A common formula reads "100% of the first 3% of pay you defer, plus 50% of the next 2%." Under that wording you must defer at least 5% of salary to collect the full amount.
Matched dollars land in the same account as your own and grow with the investments you choose. What changes from plan to plan is the vesting schedule, which decides when those employer dollars become fully yours.
Because pay, tenure and plan rules differ, the only reliable figure is the one in your plan's Summary Plan Description. Read it once, then check a pay stub to confirm the match is actually being deposited.
See the match formula written out with example salaries, or put your own numbers into the employer match calculator.
Match Formula
A match is described as a percentage of your pay, not a flat dollar figure. The exact wording of that formula decides how much you actually collect each pay period.
Salary $60,000. The employer adds $1 for every $1 you defer, up to 3% of pay.
| Salary | You defer | Your contribution | Employer match | Total credited |
|---|---|---|---|---|
| $60,000 | 0% | $0 | $0 | $0 |
| $60,000 | 2% | $1,200 | $1,200 | $2,400 |
| $60,000 | 3% | $1,800 | $1,800 | $3,600 |
| $60,000 | 5% | $3,000 | $1,800 | $4,800 |
| Maximum employer match at this salary | $1,800 | |||
Run your own figures in the match calculator, or check when the match becomes yours in vesting and match.
Match calculator
Set your salary and the match terms your plan uses. The figures update as you change a value, so you can see how a small shift in your contribution rate changes the total added to your account this year.
Common formulas match 50% of pay deferred up to 6% of salary, or 100% up to 3%. Your plan document is the source of truth for the real terms.
Employer match per year
$3,000
You put in 6% of $75,000; the plan adds 50% of each dollar on the first 4% of pay.
Educational estimate only. It ignores IRS limits and vesting schedules, and it is not financial advice. Review vesting and match rules before you act on any figure here.
Vesting and Match
Employer matching dollars often arrive with a schedule attached. Vesting is that schedule: it sets the point where matched money belongs to you even if you leave the job.
Most plans pick one of two patterns. Graded vesting releases a slice each year. Cliff vesting releases nothing until a single date, then everything at once. Both are ceilings set by plan qualification rules, so a plan may vest you faster than the table below.
| Years of service | Graded (6-year) | Cliff (3-year) |
|---|---|---|
| Under 1 | 0% | 0% |
| 1 | 20% | 0% |
| 2 | 40% | 0% |
| 3 | 60% | 100% |
| 4 | 80% | 100% |
| 5 | 100% | 100% |
| Summary | Your own deferrals are always 100% vested. Vesting applies to employer match only. | |
A qualified plan may not apply a vesting schedule slower than three-year cliff or six-year graded to employer matching contributions.
IRS 401(k) plan qualification rules
Unvested match is forfeited back to the plan and cannot be claimed later. Vested match stays in your account and can be rolled to a new employer plan or an IRA. Rehire and break-in-service rules differ by employer, so read your plan's summary description before you make a move.
Educational content only. This is not financial, tax, or legal advice, and investing involves risk.