How This Is Calculated
This calculator applies IRS Notice 2025-67 (announcing 2026 retirement plan COLA limits) and the underlying statutory framework in IRC sections 402(g), 414(v), 415(c), 401(a)(17), and 414(q). The calculation proceeds in six sequential steps. For the full statutory background, see our 401(k) Contribution Limits Guide.
Step 1: Determine Catch-Up Tier Confirmed
Catch-up eligibility under IRC section 414(v) is age-based. For 2026: age under 50 receives no catch-up; ages 50 through 59 (or age 64 and over) qualify for the standard $8,000 catch-up; ages 60, 61, 62, and 63 qualify for the SECURE 2.0 Act section 109 super catch-up of $11,250. The super catch-up does not apply at age 64 and over - those participants revert to the $8,000 standard catch-up.
Step 2: Calculate Maximum Employee Deferral Confirmed
Maximum employee deferral = $24,500 base + applicable catch-up. For 2026: under 50 = $24,500; ages 50-59 or 64+ = $32,500; ages 60-63 = $35,750. The base $24,500 limit aggregates across all 401(k), 403(b), and SARSEP plans you participate in (IRC section 402(g)). Catch-up contributions can be split across plans differently.
Step 3: Calculate Actual Employee Contribution Confirmed
Percent mode: contribution = compensation × (deferral rate ÷ 100), capped at maximum. Dollar mode: contribution = entered amount, capped at maximum. The compensation used here is your actual gross, not the $360,000 401(a)(17) cap (which only applies to the match calculation).
Step 4: Calculate Employer Match Confirmed
Match-eligible compensation = MIN(actual compensation, $360,000). For each match formula:
- 100% of first 3%: Match = MIN(deferral rate, 3%) × 100% × match-eligible comp
- 100% of first 4%: Match = MIN(deferral rate, 4%) × 100% × match-eligible comp
- 50% of first 6%: Match = MIN(deferral rate, 6%) × 50% × match-eligible comp
- Enhanced safe harbor (100% first 4% + 50% next 2%): Match = (MIN(rate, 4%) × 100% + MAX(0, MIN(rate, 6%) − 4%) × 50%) × match-eligible comp
Step 5: Annual Additions Check Confirmed
Total annual additions = employee deferral (excluding catch-up) + employer match + forfeitures. Limit per IRC section 415(c) for 2026 = $72,000 ($80,000 with age-50 catch-up; $83,250 with super catch-up). The cap also cannot exceed 100 percent of compensation. If your match would push you above the limit, the excess match is forfeited or shifted by the plan.
Step 6: Federal Income Tax Savings Confirmed
For traditional (pre-tax) contributions only: tax savings = traditional contribution × estimated marginal federal rate. The marginal rate is derived from your gross compensation minus the standard deduction (single/MFS $16,100, MFJ $32,200, HOH $24,150) under 2026 brackets per Rev. Proc. 2025-32. Roth contributions provide no current-year tax reduction. FICA tax (Social Security 6.2% + Medicare 1.45%) applies to the full deferral regardless of pre-tax or Roth treatment, because elective deferrals are not exempt from FICA under IRC section 3121(a)(5).
Roth catch-up requirement (SECURE 2.0): Beginning with catch-up contributions made in 2026, participants age 50 or over with prior-year (2025) FICA wages above $150,000 from the same employer must designate any catch-up contribution as Roth. The IRS administrative transition period generally ended December 31, 2025, and the final regulations (T.D. 10033, released September 15, 2025) did not extend it. The regulations generally apply to contributions in taxable years beginning after December 31, 2026 (later for certain governmental and collectively bargained plans); before then, plans apply a reasonable, good-faith interpretation of the statute. For 2026 the calculator flags the rule, and leaves the catch-up out of the traditional tax savings, when the 2025 Social Security wages you enter (Form W-2 box 3 from the plan's employer) are above the threshold. If you leave that box blank, it uses the compensation you enter as an estimate. Ask your plan administrator how your plan applies the rule. Confirmed
Per-pay-period match limitation: If your plan only matches per pay period (no true-up at year-end), and you max out your employee deferral early in the year, you will lose match for paychecks where your deferral falls to zero. Spread your deferral across the full year to capture the full match unless your plan has a true-up provision. This calculator estimates the full-year match assuming continuous deferral or a true-up.
Assumptions
- Tax year 2026 retirement plan limits per IRS Notice 2025-67 (released October 2025).
- 2026 federal income tax brackets and standard deductions per Rev. Proc. 2025-32.
- Employee compensation is W-2 box 1 plus elective deferrals (gross, before pre-tax 401(k) reduction).
- Employer match formula is set by the plan; the calculator selects from common safe harbor and matching formulas. Custom formulas may differ.
- Annual additions limit (IRC 415(c)) applies per employer; the calculator assumes one employer.
- Federal tax savings estimate uses the standard deduction; itemizers and other above-the-line deductions are not modeled.
- State income tax savings, FICA savings (none), and after-tax contribution layering are not modeled.