401(k) Employer Match Explained: Are You Leaving Money on the Table?
How common match formulas work, how much to contribute to get all of it, vesting, true-ups and the 2026 limits.
CalciTools Editorial · · 6 min read
An employer match is part of your pay that you only receive if you contribute. The rule of thumb is simple: contribute at least enough to get the full match. Anything less is a pay cut you chose.
How to read common match formulas
| Formula | Contribute at least | Match on $70,000 salary |
|---|---|---|
| 50% of the first 6% | 6% | $2,100 a year |
| 100% of 3% + 50% of next 2% (safe harbor) | 5% | $2,800 a year |
| 100% of the first 4% | 4% | $2,800 a year |
| 100% of the first 6% | 6% | $4,200 a year |
“50% of the first 6%” means your employer adds 50 cents for every dollar you put in, on contributions up to 6% of pay. Put in 6% and you get 3% extra. Put in 3% and you get only 1.5%.
What the missing match costs over a career
A 30-year-old earning $70,000 (3% raises, 7% returns) with a “50% of 6%” match:
- Contributing 3%: about $640,861 at 65.
- Contributing 6%: about $1,281,721 at 65.
The extra 3% of pay — which costs less than 3% of take-home pay after the tax deduction — roughly doubles the balance, because the employer’s money doubles along with it.
Vesting: when the match becomes yours
Employers can make the match vest over time. A “cliff” schedule might give you nothing until year three and then 100%; a “graded” schedule might vest 20% a year over six years. Safe-harbor matches vest immediately. If you’re thinking of changing jobs, check how much unvested match you’d leave behind.
2026 limits
You can defer up to $24,500 in 2026. At 50 or older you can add $8,000, and at 60 to 63 the catch-up is $11,250. Use the 401(k) match calculator to see the match you’re missing and the real take-home cost of contributing more.
Frequently asked questions
Does the employer match count toward the $24,500 limit?
No. The $24,500 limit covers only your own deferrals. Employer contributions count toward a much higher combined limit.
What is a true-up?
Many plans calculate the match each paycheck. If you max out early in the year, you can miss match on later paychecks. A true-up is an annual top-up that fixes this; ask HR whether your plan has one before front-loading.
What happens to my match if I leave my job?
You keep whatever is vested. Unvested match is forfeited. Your own contributions are always 100% yours.
Sources
Estimates for planning, not financial, tax or legal advice. CalciTools calculators use published government figures and the assumptions shown on each page. Your actual numbers depend on details we don’t model. Check important decisions with a qualified professional.