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Salary Deferral Contribution

Last Updated November 28, 2014

Definition

A contribution made pursuant to a participant’s election to have a portion of his/her salary/wages  contributed to his/ her employer sponsored plan  rather than have the amount paid directly to him/her in cash. A participant may elect to defer up to 100% of his/her salary/wages to the plan, up to the statutory dollar limit in effect for the year.

For qualified plans and 403(b) plans, the employer may limit salary reduction contributions to a percentage less than 100% of salary/wages, if permitted.

Different limit applies to different types of plans.

The dollar limits are as follows:

 

401(k), 403(b) and 457(b)

Year

Salary deferral/Reduction limit  

Catch-up contribution limit

2002

$11,000

$1,000

2003

$12,000

$2,000

2004

$13,000

$3,000

2005

$14,000

$4,000

2006

$15,000

$5,000

2007

$15,500

$5,000

2008

$15,500

$5,000

2009

$16.500

$5,500

2010

$16,500

$5,500

2011

$16,500

$5,500

2012

$17,000

$5,500

2013

$17,500

$5,500

2014 $17,500 $5,500
2015 $18,000 $6,000


 

 

Year

SIMPLE IRA and SIMPLE 401(k)

Salary Deferral contribution  limit

Catch-up contribution limit

2002

$7,000

$500

2003

$8,000

$1,000

2004

$9,000

$1,500

2005

$10,000

$2,000

2006

$10,000

$2,500

2007

$10,500

$2,500

2008

$10,500

$2,500

2009

$11,500

$2,500

2010

$11,500

$2,500

2011

$11,500

$2,500

2012

$11,500

$2,500

2013

$12,000

 $2,500

2014

$12,000

 $2,500

2015 $12,500 $3,000

 

Referring Cite

IRC § 403(b), IRC § 401(k), IRC § 457(b), IRC § 408(k), IRC § 408(p), IRC §402(g)

Additional Helpful Information

If an individual participates in multiple employer sponsored plans with salary reduction feature, the aggregate salary deferral contribution cannot exceed the dollar limit in effect for the year.

This does not include salary reduction contributions to 457(b) plans, as those contributions are not salary deferral contributions.