Plan Limits
401(k) PLANS/403(b) PLANS 2024 2025
The calendar year limitation on elective deferrals under IRC §402(g)(1). $23,000 $23,500
Catch-up contribution amount under IRC §414(v)(2)(B)(i) for participants $7,500 $7,500
who are age 50 or older by the last day of the calendar year.
DEFINED CONTRIBUTION PLAN LIMITATION
The limitation for defined contribution plans (Profit Sharing, $69,000 $70,000
401(k), Money Purchase) under IRC §415(c)(1)(A). This code
section limits the allocation of contribution (salary deferral, match,
employer contribution) to a participant to the lesser of 100%
of compensation or this amount. Catch-up contributions (see
above) may be made in addition to this amount.
HIGHLY COMPENSATED EMPLOYEE
Compensation for purposes of defining highly compensated $155,000 $160,000
employees under IRC §414(q)(1)(B). A highly compensated
employee is as follows:
1) More than 5% owner (and family members under stock attribution rules)
2) Employee earning over the above amount in the prior plan year*
This means if you earn over $150,000 during the Plan Year beginning in
2023* then you will be considered a highly compensated employee for
the plan year beginning in 2024.
*and, if elected, are in the top 20% of employees, ranked by compensation
COMPENSATION LIMIT
The annual compensation limit under IRC §401(a)(17) and $345,000 $350,000
404(l). This is the maximum compensation amount which can
be used for contribution allocations and discrimination testing.
KEY EMPLOYEE
Compensation for purposes of defining key employee under $220,000 $230,000
IRC §416(i)(1)(A)(i).