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Greetings, Dek4, and welcome. You asked:

<<I posted this a few days ago but now can not locate the post or any possible answers, please excuse if this a duplicat. If you were kind enough to answer, would you please repeat the answer. Many thanks.

I am needing clarification on 401K annual contribution limit makeup. Is the $10,000 limit referring only to the employee's deferal amount before any employer match is added? (Thus the annual employee+employer match amount put into the account could be over $10,000.) Or is it the combined amount that must not exceed $10,000?>>


The amount you contribute (i.e., what gets deducted from your paycheck) may not exceed the lesser of 25% of your gross pay or $10K. The percentage limit is reduced by any contribution made by your employer. If your employer puts in 6% of your pay, then you may only put in the lesser of 19% or $10K. Additionally, your contribution may be further restricted if you are in the "highly compensated" group and the "lower compensated" don't contribute enough; however, that gets into the arena of discrimination testing, which can get a tad complicated to explain. Suffice it to say that if you contribute the maximum allowed by the percentage/$10K rule as previously explained and you still end up getting part of that contribution back as an "excess" contribution, then you are in the highly compensated group and got caught up in the discrimination testing rules.

Regards….Pixy
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