Annual 401(k) Contribution Limits for 2025

September 29, 2025

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Each year, the IRS sets a limit on the amount that a plan participant can contribute to their 401(k) plan. This limit applies to both Pre-tax and Roth employee contributions. The 2025 limits were announced on November 1, 2024.

2025 Contribution Limits:

Standard Deferral Limit: In 2025, plan participants can contribute up to $23,500 to their 401(k).
Catch-Up Contributions (Secure Act 2.0 Adjustments):
- Ages 50-59: Additional catch-up contribution of $7,500, for a maximum total of $31,000.
- Ages 60-63: Increased catch-up contribution of $11,250, for a maximum total of $34,750.
  - Note: If you turn 64 at any time in 2025, your catch-up contribution is limited to just $7,500.
- Ages 64+: Standard catch-up contribution of $7,500, for a maximum total of $31,000.

Note: Ubiquity's platform will automatically apply the correct contribution limits based on the plan participant's age.

Contributing to Multiple Plans

If a participant contributes to more than one retirement plan in a calendar year (e.g., 401(k) and/or 403(b)), the total contribution limit applies across all plans combined. Employer matching or profit-sharing contributions do not count toward this limit.

If contributions exceed the annual limit, the excess amount will be refunded and may incur distribution fees.

See: How Do I Correct an Over-Contribution to My 401(k)?

Employer Contributions

Employers may also contribute to an employee's retirement account through a discretionary match or profit-sharing, with an overall maximum of:

$70,000 or 100% of participant compensation (whichever is less)
$77,500 or 100% of participant compensation (whichever is less) for employees aged 50-59 and 64+ (includes the $7,500 catch-up contribution)
$81,250 or 100% of participant compensation (whichever is less) for employees aged 60-63 in 2025 (includes adjusted catch-up contribution of $11,250)

This overall limit covers the combined total of employee contributions, employer Safe Harbor contributions, employer discretionary match, and profit-sharing contributions.

Best Practices for Managing Contribution Limits

For Plan Administrators/Sponsors, managing contribution limits is essential to prevent overfunding. Familiarity with employee and employer limits, along with implementing internal controls, can help ensure compliance.
For Plan Participants, tracking all the deferrals made throughout the year is essential, if you are participating in more than one 401(k) or 403(b) throughout the year, ensure that you have not exceeded the annual deferral limit across all plans.

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