401(k) Contribution Limits for 2026: What Employees and Employers Need to Know

The IRS adjusts retirement plan contribution limits most years to keep pace with inflation, and 2026 brings a real increase, not just a token bump. Here’s what changed and what it means for payroll.

Last updated: July 2026

2026 401(k) Contribution Limits at a Glance

These limits apply to 401(k), 403(b), and most 457 plans, as well as the federal Thrift Savings Plan.

What Is the Employee Salary Deferral Limit?

The employee salary deferral limit is the maximum amount an employee can contribute to their own 401(k) from their paycheck in a calendar year, before any employer match or profit-sharing contribution. For 2026, that limit is $24,500, up $1,000 from 2025.

This limit applies per person across all 401(k) plans they participate in during the year, not per employer. Someone who changes jobs mid-year and contributes to two different employers’ 401(k) plans still has a combined $24,500 cap.

Catch-Up Contributions for 2026

Employees age 50 and older can contribute beyond the standard deferral limit. For 2026, the standard catch-up amount, available to employees age 50 to 59 and those 64 and older, rises to $8,000, on top of the $24,500 base limit.

A special, higher catch-up applies to employees age 60 to 63: $11,250 for 2026, unchanged from 2025. That means an eligible employee in this age band can defer up to $35,750 total for the year.

The New Roth Catch-Up Rule for Higher Earners

Starting in 2026, employees whose prior-year FICA wages from that employer exceeded $150,000 must make any catch-up contributions as Roth, meaning after-tax, rather than pre-tax. This is a mandatory change, not an employee election, and payroll systems need to correctly identify which employees are subject to it based on the prior year’s W-2 wages.

Employers should confirm their payroll provider can properly split standard pre-tax deferrals from Roth catch-up contributions for affected employees, since getting this wrong creates a correction headache well after the plan year has closed.

The Combined Contribution Limit

Beyond the employee’s own deferral, there’s a separate cap on the total of employee contributions, employer match, and any profit-sharing contributions combined. For 2026, that combined limit is $72,000, up from $70,000 in 2025. Catch-up contributions for eligible employees are added on top of this combined limit, not counted within it.

Why This Matters for Payroll Teams

Contribution limits reset every January 1, and payroll systems need updated figures loaded before the first payroll of the year to avoid over-withholding or under-withholding deferrals. It’s also worth notifying employees directly, since many set a fixed percentage or dollar amount and don’t realize the cap moved, especially employees close to maxing out their contributions each year.

Netchex keeps retirement plan contribution limits current in payroll automatically each year, and flags employees approaching the annual cap so deferrals stop precisely at the limit instead of relying on manual tracking.

Frequently Asked Questions

This guide reflects publicly available IRS guidance as of July 2026. Contribution limits are subject to change; confirm current figures with the IRS or your plan administrator before making elections. Netchex does not give legal, tax, or accounting advice.

Disclaimer: Any product roadmap or future plans provided herein are for informational purposes only. They do not represent a commitment to deliver any material, code, feature, or functionality. Plans may change without notification. The development, release and timing of any features or functionality described remain at the sole discretion of Netchex, its affiliates, and partners. Netchex does not give legal, tax, or accounting advice. You are responsible for ensuring your use of Netchex product meets your individual business and compliance requirements.

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