What is the maximum employee contribution limit for a 401(k) plan?

The maximum employee contribution limit for a 401(k) plan is set by the IRS and is adjusted periodically for inflation. For the year 2023, the limit is $22,500 for employees under the age of 50. This indicates that the answer provided is not the most recent limit as of that date, failing to accurately represent current regulations.

In addition to the base contribution limit, there are also catch-up contributions available for employees aged 50 and over, allowing them to contribute an additional amount, which further increases the potential to save for retirement.

Understanding the correct contribution limits is vital for payroll professionals and plan administrators to ensure compliance with federal regulations and to assist employees in maximizing their retirement savings. Keeping abreast of annual changes is critical in providing accurate information to employees considering their retirement planning.