Catch-up contributions

What catch-up contributions are

An employee who is 50 or older by December 31 can defer more than the standard limit, if the plan allows catch-up contributions. For 2026 the extra amount is $8,000, so a 55-year-old can defer $24,500 plus $8,000, or $32,500. Employees who turn 60, 61, 62 or 63 during the year have a higher catch-up limit of $11,250.

For 2027 the catch-up rises to $8,500, or $11,750 at ages 60 to 63. (IRS Notice 2026-66)

Catch-up contributions do not count toward the $72,000 annual additions limit, and they are left out of the ADP test.

Why it matters to employers

Three things need attention. First, your plan document has to permit catch-ups, and if it does, every eligible participant must have the same opportunity. Second, payroll has to recognize when an employee crosses from regular deferrals into catch-up. Third, a Roth requirement now applies to higher earners: employees whose prior-year Social Security wages from you were above $150,000 must make their 2026 catch-up contributions as Roth.

Example with 2026 figures

A 52-year-old controller earns $140,000 and defers $32,500. The first $24,500 is regular deferral and the last $8,000 is catch-up. Her 2025 wages were under $150,000, so she can choose pre-tax or Roth for the catch-up.

Common mistakes

• Offering a match on catch-up deferrals without checking what the plan document says.

• Not having a Roth option. If the plan has no Roth feature, employees subject to the Roth rule cannot make catch-up contributions at all.

• Using age on the date of the contribution. Eligibility is based on the age the employee reaches by year end.

• Missing the higher limit for ages 60 to 63, or applying it to someone who turns 64 during the year.