401(k) contribution calculator
A traditional deferral comes out of pay before income tax, so it saves tax at the rate on your top dollars. The elective deferral limit for 2026 is $24,500.
Gross wages before any deferral.
Roth deferrals save no tax now, so leave those out.
Catch up contributions add $8,000 at age 50, or $11,250 at ages 60 to 63.
Most states follow the federal treatment of a deferral.
Results
$24,500 base for 2026.
The deferral less the tax it saves.
Social Security and Medicare are charged on gross wages, so a traditional deferral does not reduce either one. The saving above is income tax alone.
Assumptions
- The deferral limit is the 2026 elective deferral figure of $24,500, plus whatever catch up allowance you enter.
- The deferral is traditional, meaning pre tax. A Roth deferral saves nothing now, so entering one here would overstate the saving.
- Social Security and Medicare are charged on gross wages, so the deferral does not reduce them. Only income tax moves.
- Employer matching is not counted. A match is not part of your elective deferral limit, though it does count towards the separate overall contribution limit.
- The state schedule is applied to income before the federal standard deduction, and most states follow the federal treatment of a deferral. States that do not are not modelled.
- No credits are applied, and the saver's credit is out of scope.
- The deferral cannot exceed your salary, so a contribution larger than income is cut to income.
Sources
- 401(k) and profit sharing plan contribution limits, Internal Revenue Service, checked 30 August 2026
- Federal income tax brackets for 2026, Internal Revenue Service, checked 30 August 2026
Catch up contributions add $8,000 at age 50, or $11,250 at ages 60 to 63.
How this works
Money you defer into a traditional 401(k) never appears in the wages box your income tax is calculated from. Because the deferral comes off the top of your income rather than the bottom, it saves tax at your highest rate. Someone whose last dollars are taxed at 24 percent keeps 24 cents of every dollar deferred, before any state tax on top of that.
Payroll tax works differently and this is where the comparison with an RRSP breaks down. Social Security and Medicare are charged on gross wages, so deferring changes nothing there. Your paycheck drops by the deferral minus the income tax saving, and the payroll line stays exactly where it was.
The limit covers what you defer, not what your employer adds. A match sits outside the elective deferral limit and inside a separate and much larger overall limit for the account. That is why a match is often described as money left on the table if you contribute too little to earn all of it.
Tax arrives later instead of now. Withdrawals in retirement are ordinary income, so the deferral is worth the gap between your rate today and your rate then. A Roth deferral takes the opposite trade, paying tax now for untaxed withdrawals later. For the brackets behind these figures, the bracket page lists all four filing statuses.