What your employer really adds: match formulas, per-paycheck traps, and true-up
Employer matches come in three shapes. Dollar-for-dollar: 100% of the first 3% of salary — on $75,000, contribute $2,250 and the company adds $2,250. Partial: 50 cents per dollar, typically up to 6%, worth 3% of pay. Tiered: 100% of the first 3% plus 50% of the next 2%, worth 4% of pay — $3,000 a year on a $75,000 salary once you contribute at least 5%. The trap is per-paycheck matching without a true-up: front-load the $24,500 IRS limit and paychecks with $0 withheld earn $0 match — a $200,000 earner contributing 20% per check loses $3,077 that way. Vanguard's data puts the average employer contribution at roughly 4-5% of pay.
| Formula | Max Match | Contribution Needed for Max | Employer Adds on $75,000 |
|---|---|---|---|
| 100% of first 3% | 3% of pay | 3% ($2,250) | $2,250/yr ($187.50/mo) |
| 100% of first 4% | 4% of pay | 4% ($3,000) | $3,000/yr ($250/mo) |
| 100% of first 5% | 5% of pay | 5% ($3,750) | $3,750/yr ($312.50/mo) |
| 50% of first 6% | 3% of pay | 6% ($4,500) | $2,250/yr ($187.50/mo) |
| 50% of first 8% | 4% of pay | 8% ($6,000) | $3,000/yr ($250/mo) |
| 100% of first 3% + 50% of next 2% (tiered) | 4% of pay | 5% ($3,750) | $3,000/yr ($250/mo) |
| 75% of first 6% | 4.5% of pay | 6% ($4,500) | $3,375/yr ($281.25/mo) |
Dollar amounts assume steady contributions every paycheck. Vanguard's How America Saves puts the average employer contribution around 4-5% of pay, so a formula capping below 3% is below market and one paying 5%+ is generous. Some employers also make nonelective contributions (profit sharing) on top of any match, which the summary plan description (SPD) will spell out.
A match is a formula your employer applies to your own contributions, and every formula has two numbers: the match rate (how many cents per dollar they add) and the cap (the percent of salary it applies to). This calculator handles the three most common structures and the two accounting styles that decide whether front-loading costs you money.
Match = salary x min(your %, cap %) x (match rate / 100). For tiered plans, match = salary x [min(your %, 3) + 0.5 x max(0, min(your %, 5) − 3)]. Per-paycheck matching applies this each payday; a true-up plan reconciles the whole year at once. When your salary is high enough that you hit the $24,500 deferral limit before year-end, the calculator also shows the match a per-paycheck plan would forfeit on your $0 paychecks.
Pull your plan's formula from your summary plan description or HR portal — it will read like "100% of the first 3% of eligible pay." Pick that shape from the dropdown, set the cap to match, and enter your intended contribution. If you plan to contribute a flat dollar amount per paycheck early in the year (front-loading), check the true-up box only if your plan actually has one; otherwise the "match lost" figure tells you what it costs.
A $75,000 salary with a tiered match (100% of the first 3%, 50% of the next 2%). Contributing 2% ($1,500): the match is 100% x 2% = 2%, or $1,500 — you're leaving $1,500 on the table. Contributing 3%: match is 3% = $2,250. Contributing the full 5% ($3,750): match is 3% + 0.5 x 2% = 4%, or $3,000 a year, paid as $115.38 per biweekly paycheck. Above 5%, your own savings keep growing but the match is capped — contributing 10% still earns $3,000.
Now the front-loading trap on the same plan. A $200,000 earner contributes 20% of every paycheck, about $1,538. The $24,500 limit runs out after 16 of 26 paychecks ($4,923 of match earned). Without a true-up, the remaining 10 paychecks contribute nothing and match nothing, forfeiting 10 x $307.69 = $3,077. With an annual true-up, the plan pays the full 4% x $200,000 = $8,000 anyway, usually as a lump sum early the next year.
Match dollars are subject to a vesting schedule — typically 3-year cliff or 6-year graded — so leaving early can forfeit some or all of them. Your own contributions are always 100% yours from day one.
Your employer contributes one dollar for every dollar you put in, capped at 3% of your salary. Earn $75,000 and contribute at least 3% ($2,250 a year) and the employer adds $2,250. Contribute only 2% and they add $1,500; contribute 10% and they still add $2,250, because the cap is on the match, not your contribution.
A 50% (or "50 cents on the dollar") match pays half of what you contribute up to a cap. The most common setup is 50% of the first 6%, which maxes at 3% of salary. On $75,000 you'd contribute $4,500 to get the full $2,250. Tiered formulas stack both styles: 100% of the first 3% plus 50% of the next 2% pays 4% of salary ($3,000 on $75k) once you contribute at least 5%.
A true-up provision means the employer reconciles your match once a year instead of (or in addition to) each payday. It protects you when you front-load contributions and hit the IRS limit early: without a true-up, paychecks with $0 withheld earn $0 match. A $200,000 earner contributing 20% per paycheck hits the $24,500 limit after 16 of 26 paychecks and loses $3,077 of match on the other 10 without a true-up.
Vanguard's How America Saves data puts the average employer contribution around 4% to 5% of pay. On a $75,000 salary that's $3,000 to $3,750 a year, or up to $112,500 over a 30-year career before any investment growth. Contributing below your match cap is the most expensive mistake in personal finance; if you can't afford the full match, contribute what you can and step it up 1% a year.
The IRS elective deferral limit for 2026 is $24,500, up from $23,500 in 2025. Catch-up contributions for ages 50 and over rise to $8,000, and the SECURE 2.0 "super" catch-up for ages 60-63 stays at $11,250. One change to watch: starting in 2026, workers whose prior-year FICA wages exceed $145,000 must make catch-up contributions as Roth.
No. The $24,500 cap covers only your elective deferrals. Employer matching dollars count toward the much higher combined limit ($72,000 in 2026 including employee deferrals), which most people never approach. So you can contribute $24,500 yourself and still receive the full match on top.