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Any company contributions are excluded from this dollar amount.
The rules change for 2002.

The current rule is: Any employee may contribute up to $10,500 in pre tax dollars as long as this does not exceed 25% of total pay.
The employer contribution is subject to limits as well and that is tied to what the employee puts in. The total amount received into the 401k plan by any 1 person can not exceed $35,000 or 25% of pay.

Here is an example. If you make $100,000 you may contribute $10,500,which equals 10.5% of your pay. Your employer may then contribute another 14.5%. This would bring you up to the 25% combined limit.

For 2002. The employee contributions are not linked to the employer, so an employee may put in as much as he or she wants not to exceed $11,000. There is no percentage limit in 2002. So a person making $22,000 can put 50% of their income away.
The employer may then contribute an additional 25% of pay. The only limitation is that employee + Employer contributions cannot exceed $40,000 or 100% of pay.
Hope this made sense, the U.S Internal Revenue Service likes tomake things a twisted as possible. It keeps s rom questionong their authority to take our money. If we can't understand what they are doing, how can we possibly argue against them.
Anyway, I hope this helped, if not please respond with follow up questions.

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