Employer 401(k) Match Calculator

What this calculator answers

It finds the contribution rate that collects every dollar your employer offers and what the match is worth at the rate you pay in now: per year, per paycheck and after vesting. Enter your plan’s formula as tiers, the way your plan describes it, with a yearly dollar cap if there is one. With your deferral limit for the year entered, it also checks whether your contributions stop before your last paycheck, and what that costs if the match is figured paycheck by paycheck. It works for 401(k), 403(b) and other workplace plans that match what you defer. It doesn’t project your balance into the future; a retirement savings calculator does that.

How to use it

• Annual salary: yearly pay before tax, in dollars. Use the pay your plan counts for the match. The plan document defines it as “compensation”, and some plans leave out bonuses, commissions or overtime.
• Your contribution: the percent of each paycheck you defer, from your plan’s website or your pay stub. Type 6 for 6%.
• Tiers are written as: follow your plan’s wording. “50% on the next 2%” is a slice that starts where the tier above ends; “50% up to 5%” is a running total from 0% of pay. Switching rewrites the rows the other way.
• Matching tiers: one row per tier. Match rate is what the employer adds for each dollar you put in, as a percent: 100 is a dollar for a dollar, 50 is 50 cents. Slice of pay (or Upper limit) is the pay the tier covers. The line under each box shows how it was read, such as “Pay from 1% to 6%”.
• Match cap (optional): a dollar limit on the match, if your plan has one.
• Vested share (optional): the percent of employer money you would keep if you left today, from your plan statement.
• Paychecks a year: used for the per-paycheck amounts.
• Deferral limit (optional): the IRS limit on your own deferrals for the year, plus any catch-up amount you are eligible for. The IRS publishes it each year. Once it is entered, How the match is figured asks whether your plan matches the year’s totals (or trues up at year end) or each paycheck on its own.

The Try buttons load four common formulas and a front-loading case. To compare two plans or job offers, press Save for comparison, change the inputs and save again: the table shows the difference in match. Continue in the Roth vs. Traditional Calculator takes your yearly contribution there, to weigh the two account types; Continue in the Retirement Savings Calculator takes what you and your employer put in a year, to project the balance.

How does a 401(k) match work?

For each dollar you defer from your pay, your employer adds a set amount, but only on contributions up to a percent of your pay. A formula can have several tiers, each with its own rate on its own slice of pay. The match for the year is:

• $S$ is your salary, the pay the plan counts.
• $c$ is your contribution rate as a share of pay (5% is 0.05).
• Tier $k$ matches at rate $r_k$ (0.5 for 50 cents per dollar) on pay from $a_k$ to $b_k$.
• The cap applies only if your plan has one.

Only contributions up to the top of the last tier are matched. Contributing more still adds to your savings, but not to the match.

What does “50% of the first 6%” mean?

The employer adds $0.50 for every $1 you put in, on contributions up to 6% of your pay. The most it adds is half of 6%, which is 3% of pay. On a $68,000 salary:

So it is neither 50% of your salary nor 6% of pay from the employer: at 6% you receive 3%.

How much should I contribute to get the full match?

At least the percent of pay where the last tier ends. Below it, part of the match goes unclaimed; above it, the match stays the same. A yearly dollar cap can bring that rate down, because the cap may be reached before the tiers are full.

The Match at other contribution rates table shows your own formula the same way, one percent at a time.

Worked example: $68,000 at 5% with a two-tier match

The plan matches 100% of the first 1% of pay and 50% of the next 5%. You earn $68,000, contribute 5% of each paycheck, are paid every 2 weeks (26 paychecks) and are 40% vested.

1. Your contribution: $68,000 × 5% = $3,400.00 a year, or $130.77 a paycheck.
2. Tier 1 covers the first 1% of pay, and your 5% fills it: 100% × 1% = 1% of pay = $680.00.
3. Tier 2 covers pay from 1% to 6%. You put in 4% of pay there: 50% × 4% = 2% of pay = $1,360.00.
4. Employer match: $680.00 + $1,360.00 = $2,040.00 a year (3% of pay), or $78.46 a paycheck. That is $0.60 for each $1 you put in.
5. Full match: 6% of pay fills both tiers, $680.00 + $1,700.00 = $2,380.00. At 5% you leave $340.00 a year unclaimed.
6. Raising your contribution to 6% takes $680.00 more of your pay a year and brings $340.00 more match.
7. Vested: $2,040.00 × 40% = $816.00 is yours if you leave now; $1,224.00 is not yet vested.

Multi-tier matches and yearly dollar caps

Tiers are slices of pay, each matched at its own rate. “100% of the first 3% and 50% of the next 2%” is the same formula as “100% up to 3% and 50% up to 5%”: the second tier covers pay from 3% to 5%. Entering the second wording as “the next 5%” would stretch that tier to 8% of pay and overstate the match, so check the “Pay from … to …” line under each row. In the up-to wording, each upper limit must be higher than the one before it. If the rows are out of order, the calculator reads them from the lowest limit and offers to sort them.

A cap stops the match at a dollar amount for the year, whatever the tiers would give. With the worked example’s tiers and a $1,500 cap, the match reaches $1,500 at a contribution of 3.42% of pay (4% in whole percents), so contributing 5% earns no more match than 4%.

Vesting: how much of the match is yours if you leave

Your own contributions are always 100% yours. Employer money may follow a vesting schedule set by the plan: all at once after some years of service (cliff vesting) or a larger share each year (graded vesting). The IRS vesting page shows, for example, a cliff schedule that reaches 100% after 3 years and a graded one that starts at 20% after 2 years and adds 20% a year to reach 100% after 6. When you leave, the plan can take back the part that isn’t vested.

Enter the vested share from your plan statement. The calculator applies it to this year’s match, to show how much of it you would keep if you left now; the same share applies to all the employer money already in your account.

Per-paycheck matching and front-loading your contributions

Many employers match each paycheck in which you defer. If a high contribution rate reaches your yearly deferral limit before your last paycheck, the paychecks after that have nothing to match. Unless the plan makes up the difference at year end (a true-up), that match is lost.

The Limit hit early, no true-up example shows how much. At $200,000 and 15%, you would defer $30,000.00, but with a $20,000 limit (an illustration, not a current figure) your deferrals stop in paycheck 18 of 26:

• Figured each paycheck: 17 full paychecks with $269.23 of match each and $230.77 on paycheck 18, $4,807.69 in all.
• Figured on the year’s totals: $20,000 is 10% of pay, which fills every tier, so the match is $7,000.00, or $2,192.31 more.
• Contributing 10% or less spreads the $20,000 over all 26 paychecks and earns the full $7,000.00 either way. At 16%, the paycheck-by-paycheck match falls to $4,500.00.

The Paycheck by paycheck table appears whenever your limit is reached early. Your summary plan description says whether your plan matches each paycheck and whether it trues up.

Reading the result

• Rate for the full match is the smallest contribution rate that collects the whole match. When a dollar cap sets it, it is rounded up to two decimals, with the whole percent beside it.
• Employer match a year is what the formula gives at your rate after any cap, with the amount per paycheck and per $1 you put in.
• Unclaimed match a year is the full match, or the most your limit allows, minus what you get.
• Match from your next 1% is what one more percent of pay would add, and the table’s Next 1% adds column shows the same at each rate. It is $0.00 above the full-match rate, and it turns negative when the extra point makes your deferrals stop sooner.
• Vested match splits this year’s match by your vested share.
• How this was calculated goes through each tier with your numbers and ends with the same formula for a spreadsheet.
• Match by tier lists each slice of pay, what you put into it and what it pays.
• Match at other contribution rates repeats the calculation at each whole percent up to two points past the full-match rate, with the change from your rate. The chart shows the same numbers.

What this calculator doesn’t include

• Your plan’s definition of pay. Enter the pay your plan counts, with or without bonuses, commissions and overtime as its document says.
• The IRS limit on the pay a plan can count, which changes each year. If your salary is above it, enter the limit as your salary.
• Waiting periods before you can join the plan or get the match, and changes to your rate during the year.
• Profit sharing and other employer contributions that don’t depend on what you defer.
• Taxes, investment returns and fees. The result is an educational estimate, not tax or financial advice; your plan document decides the actual match.

Common mistakes

• Reading “50% up to 6%” as a 6% match. The employer adds 50 cents per dollar on up to 6% of pay, so the most you get is 3% of pay.
• Entering running totals as slices. “50% up to 5%” after “100% up to 3%” is a 2% slice. Choose Up to X% of pay, or enter 2.
• Typing the match rate as a fraction. The box is in percent: 1 means 1 cent per dollar, and a dollar-for-dollar match is 100.
• Hitting the limit early. With paycheck-by-paycheck matching and no true-up, a rate that stops your deferrals before your last paycheck loses match. Enter your limit to check.
• Counting the unvested match as yours. If you might change jobs soon, the vested share is what you keep.
• Dropping below the full-match rate when you switch to Roth contributions. The match depends on how much you contribute, not on the account type.