The 2027 401(k) limit is $25,500, catch-ups rise to $8,500 and $11,750, and total additions hit $75,000. Every 2027 limit, plus what employers do next.
Updated November 13, 2026
Short answer: For 2027, employees can defer up to $25,500 into a 401(k), up $1,000 from 2026. Employees 50 and older can add an $8,500 catch-up, and employees who turn 60, 61, 62 or 63 in 2027 can add $11,750 instead. Total contributions to one person’s account, employee and employer combined, can reach $75,000 before catch-ups. The IRS announced the numbers on November 12, 2026 in Notice 2026-66.
The bigger change for employers isn’t a dollar amount. Starting January 1, 2027, the final rules on Roth catch-up contributions stop being a “good faith” exercise and fully apply. If you have employees over 50 who earned more than $155,000 from you in 2026, payroll needs to be ready before the first paycheck of the year.
The 2027 limits at a glance
Limit | 2027 | 2026 | Change |
|---|---|---|---|
Employee deferrals (401(k), 403(b), 457(b), TSP) | $25,500 | $24,500 | +$1,000 |
Catch-up, age 50 and older | $8,500 | $8,000 | +$500 |
Catch-up, ages 60 to 63 | $11,750 | $11,250 | +$500 |
Total additions per person (employee + employer) | $75,000 | $72,000 | +$3,000 |
Compensation used for contributions | $375,000 | $360,000 | +$15,000 |
Highly compensated employee (HCE) pay threshold | $170,000 | $160,000 | +$10,000 |
Key employee (officer) threshold | $245,000 | $235,000 | +$10,000 |
Roth catch-up wage threshold (prior-year FICA wages) | $155,000 | $150,000 | +$5,000 |
SIMPLE 401(k) and SIMPLE IRA deferrals | $17,500 | $17,000 | +$500 |
IRA contributions | $7,500 | $7,500 | No change |
IRA catch-up, age 50 and older | $1,100 | $1,100 | No change |
Source: IRS Notice 2026-66.
How much one employee can put in
The deferral limit is per person, not per plan. An employee who has two jobs in 2027, or switches jobs mid-year, gets one $25,500 limit across every 401(k) and 403(b) they contribute to. Pre-tax and Roth deferrals share that same limit.
Employee’s age in 2027 | Deferral limit | Catch-up | Most they can defer |
|---|---|---|---|
Under 50 | $25,500 | none | $25,500 |
50 to 59, or 64 and older | $25,500 | $8,500 | $34,000 |
60, 61, 62 or 63 | $25,500 | $11,750 | $37,250 |
Age is based on the end of the calendar year. Someone who turns 50 on December 31, 2027 can make catch-up contributions all year. The higher catch-up applies to anyone who turns 60, 61, 62 or 63 during 2027. At 64 it drops back to the regular $8,500.
Total additions: the $75,000 ceiling
The $75,000 limit under section 415(c) counts everything that goes into one person’s account in a plan year: their deferrals, your match, profit sharing and any after-tax contributions. Catch-up contributions sit on top of it. So the real ceiling is:
$75,000 for employees under 50
$83,500 for employees 50 and older ($75,000 + $8,500)
$86,750 for employees 60 to 63 ($75,000 + $11,750)
Most employees will never come close. It matters for owners and high earners, and for plans that allow after-tax contributions. If a plan allows them, an employee who defers $25,500 and gets $10,000 from the employer still has $39,500 of room for after-tax money. That’s the gap a mega backdoor Roth uses.
The compensation cap: $375,000
Only the first $375,000 of an employee’s pay counts when you calculate contributions in 2027. If your match is 4% of pay, the most anyone can receive is $15,000 (4% of $375,000), even if they earn $600,000. Check that your payroll system caps pay at this figure for match and profit-sharing calculations.
Roth catch-ups for high earners: 2027 is the real start
Since 2026, employees 50 and older whose prior-year FICA wages from your company were above the threshold have had to make catch-up contributions as Roth. For 2027 catch-ups, the test looks at 2026 wages, and the threshold is $155,000.
What’s different in 2027 is enforcement. The IRS’s final regulations (T.D. 10033) let plans use a reasonable, good-faith approach in 2026. They generally apply in full to contributions in tax years starting after December 31, 2026. Governmental and collectively bargained plans can get a later date.
What to check before January:
Pull 2026 FICA wages. Use Box 3 of the 2026 W-2 you issue (Social Security wages) for each employee who will be 50 or older in 2027. Anyone above $155,000 is affected. The test only counts wages from your company, not other jobs.
Make sure your plan offers Roth. If it doesn’t, affected employees can’t make catch-up contributions at all. Most providers can add a Roth option with a plan amendment.
Decide how payroll handles it. Many plans use a “deemed Roth” election, which switches an affected employee’s catch-ups to Roth automatically. Confirm your provider and payroll system are set up the same way.
Tell the people affected. Their take-home pay drops slightly, because Roth contributions come out after tax.
Who counts as highly compensated
The HCE threshold rises to $170,000. Most plans use a look-back, so the number works one year behind:
For the 2027 plan year, an employee is an HCE if they earned more than $160,000 in 2026 (or own more than 5% of the business).
For the 2028 plan year, the line is pay above $170,000 in 2027.
HCE status drives nondiscrimination testing. If your plan isn’t safe harbor, more HCEs saving close to $25,500 makes the ADP and ACP tests harder to pass. A safe harbor plan skips those tests in exchange for a required employer contribution. See safe harbor 401(k) plans.
The key employee threshold for top-heavy testing rises to $245,000.
SIMPLE and starter plans
SIMPLE 401(k) and SIMPLE IRA: $17,500 in deferrals, up from $17,000. Employers with 25 or fewer employees, and some larger employers that make a higher contribution, can allow $19,100. The age 50 catch-up stays at $4,000 ($3,850 in those higher-limit plans), and the 60 to 63 catch-up stays at $5,250.
Starter 401(k): $6,500, up from $6,000, plus $1,100 for employees 50 and older.
Emergency savings accounts linked to a plan (PLESAs): $2,700, up from $2,600.
IRA limits for 2027
The IRA limit stays at $7,500, with a $1,100 catch-up at 50 and older. The income ranges moved up:
2027 phase-out range | |
|---|---|
Roth IRA, single or head of household | $158,000 to $173,000 |
Roth IRA, married filing jointly | $250,000 to $260,000 |
Traditional IRA deduction, single, covered by a workplace plan | $83,000 to $93,000 |
Traditional IRA deduction, married filing jointly, contributor covered by a workplace plan | $133,000 to $153,000 |
Traditional IRA deduction, contributor not covered but spouse is | $250,000 to $260,000 |
One more 2027 change for lower-income savers: the Saver’s Match replaces the Saver’s Credit for contributions to retirement plans and IRAs. The Saver’s Credit stays only for ABLE account contributions.
What employers should do before January 1
Update deferral caps in payroll to $25,500, $8,500 and $11,750. Most providers update the IRS limits automatically, but confirm it.
Run the Roth catch-up check above using 2026 W-2 wages.
Recheck your match math against the $375,000 compensation cap and any true-up provision.
Tell employees. A short note with the new numbers is enough. Employees who max out early in the year will want to change their percentage.
Watch mid-year hires. A new hire may have already contributed at a previous employer this year. The IRS limit counts both, and the employee is responsible for tracking it.
How Basic Capital handles the new limits
On a plan migration, when your company moves its existing 401(k) to Basic Capital, we carry over year-to-date contributions so the IRS limits still hold after the switch. Contributions an employee made at a previous employer or in an outside 401(k) aren’t carried over. The employee tracks those against their own limit. Annual testing, including the 402(g) and 415 limits, is run on platform data with our TPA partners. Plans can turn on after-tax contributions for a mega backdoor Roth after a compliance review.
Book a demo to see how a plan would run for your team.
Frequently asked questions
What is the 401(k) contribution limit for 2027? $25,500 in employee deferrals. Employees 50 and older can add $8,500, and employees aged 60 to 63 can add $11,750 instead.
Does the employer match count toward the $25,500? No. The $25,500 limit covers only what the employee defers from pay. The match counts toward the separate $75,000 total additions limit.
When do the 2027 limits start? January 1, 2027. They apply to contributions from pay dated in 2027, even if the work was done in December 2026.
I have two jobs. Do I get two limits? No. The $25,500 deferral limit is per person across all your 401(k) and 403(b) plans. The $75,000 total additions limit applies separately to each unrelated employer’s plan.
Who has to make catch-up contributions as Roth in 2027? Employees 50 and older whose 2026 FICA wages from the employer sponsoring the plan were more than $155,000.
Did the IRA limit go up for 2027? No. It stays at $7,500, plus $1,100 for people 50 and older. The income limits for Roth IRAs and for deducting traditional IRA contributions did go up.
References
Internal Revenue Service. (2026, November 12). 401(k) limit increases to $25,500 for 2027, IRA limit remains $7,500 (IR-2026-136). https://www.irs.gov/newsroom/401k-limit-increases-to-25500-for-2027-ira-limit-remains-7500
Internal Revenue Service. (2026). Notice 2026-66: 2027 amounts relating to retirement plans and IRAs, as adjusted for changes in cost-of-living. https://www.irs.gov/pub/irs-drop/n-26-66.pdf
Internal Revenue Service. (2025). Internal Revenue Bulletin 2025-40 (T.D. 10033, final regulations on catch-up contributions). https://www.irs.gov/irb/2025-40_IRB
Internal Revenue Service. (2025, November 13). 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (IR-2025-111). https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
All retrieved 2026-11-13.
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