Each year, the Internal Revenue Service (IRS) raises the contribution limits for 401(k) retirement plans, allowing employees to put aside more for the future. Below you will find an overview of the current 401(k) contribution limits for 2024 and the updated limits for 2025.
Current Contribution Limits for 2024
For 2024, the 401(k) contribution limit is set at $23,000 for employee salary deferrals, with a combined limit of $69,000 for both employee and employer contributions. If you are 50 or older, you can take advantage of an additional $7,500 in catch-up contributions, bringing your employee deferral limit to $30,500.
Updated Contribution Limits for 2025
In 2025, the employee contribution limit increases by $500, rising from $23,000 to $23,500. Additionally, individuals aged 50 and older can still make annual catch-up contributions of $7,500. The combined limit for both employee and employer contributions have increased by $1,000 making the limit $70,000.
Introduction to Increased Catch– Up Contribution
In 2025, the IRS introduces a new catch-up contribution limit of $11,250 for individuals aged 60 to 63. For those eligible, this amount replaces the standard catch-up contribution, meaning you can contribute a total of $11,250 in catch-up contributions for the year, not $11,250 in addition to the regular $7,500 catch-up.
Other Notable Increases
Compensation: The maximum annual compensation that can be considered for contributions and deductions will rise to $350,000, up from $345,000.
Highly Compensated Employee (HCE): The threshold for defining a “highly compensated employee” will increase to $160,000, up from $155,000.
Key Employee: The threshold for determining whether an officer qualifies as a “key employee” under the top-heavy rules and cafeteria plan nondiscrimination rules will increase to $230,000, up from $220,000.
| Pre-Tax Employee Contributions | Employee & Employer Contributions | Catch-up Contributions | |
| 401(k) contribution limits for 2024 | $23,000 | $69,000 | $7,500 annually, for those 50 and over |
| 401(k) contribution limits for 2025 | $23,500 | $70,000 | $7,500 annually, for those 50 and over; $11,250 annually for those 60 to 63 |
Source: IRS.gov