The Match Is Part of Your Pay

The story: Jade’s unclaimed pay

In a break room, Jade looks at a paystub while a coworker, Marcus, sketches a match formula and a rising chart.

1. Narrator: Jade works at a warehouse, earns $3,000 a month (example) and puts 3% of pay into the 401(k).
2. Marcus: Do you know your match? Ours is 50% of the first 6%.
3. Jade: I’ve seen that line. I just don’t know what it means.
4. Marcus: Put in 6% and the company adds half of that: 3% more. Put in 3% and you get only half the match.
5. Narrator: At 6%, Jade puts in $180 a month and gets $90. At 3%, Jade puts in $90 and gets $45. The other $45 a month goes unclaimed.
6. Jade: So the match is part of my pay, and I’ve been leaving some of it behind.

What you’ll learn

1. Reading a match formula

   A match formula reads like “50% of the first 6%.” For every dollar you put in, up to 6% of your pay, the employer adds 50 cents. Put in less than 6% and you get less match. Put in more and the match stays the same.

   Example: on $3,000 a month, 6% is $180. Half of that, $90, is the match.

2. Vesting: when the match becomes yours

   Your own contributions are always yours. The match may follow a vesting schedule: it becomes yours over time, like 25% a year over four years. Leave before you’re fully vested and you may give up part of the match.

3. Auto-enroll, raises and the student loan match

   Many plans enroll new workers at a low rate and raise it a little each year. Many people also step up their rate with each raise. Some employers match student loan payments as if they were 401(k) contributions.

4. 403(b), 457(b) and the yearly limit

   Schools, hospitals and nonprofits often offer a 403(b), and governments a 457(b). They work much like a 401(k). A government 457(b) has its own separate limit, no early-withdrawal penalty after you leave that job, and rarely a match. The yearly limit on what you put into a 401(k) is $24,500.

Key words

employer match

money your employer adds when you put money in

vesting schedule

when the employer’s match becomes fully yours

auto-enroll

being signed up for a plan unless you opt out

contribution rate

the percent of each paycheck you put in

Common questions

What if I can’t afford to put in enough for the full match?

Many people start with what fits and raise the rate by 1% at each raise or each year. Some plans can do that for you automatically.

Remember this

The match is part of your pay.

Try it: Find your match formula

1. Find your plan’s match formula and vesting schedule in your benefits papers.
2. Work out the percent you’d need to put in to get the full match.
3. Check your current rate on your paystub.

Work out your match on paper with your formula, or try the Retirement Calculator with the match added.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• 401(k) yearly limit

  $24,500

  What an employee can put into a 401(k), 403(b) or most 457 plans in a year, before catch-up

  As of 2026

  Source: IRS.gov(opens in a new tab)

• 457(b) plan rules and its separate limit

  Source: IRS.gov(opens in a new tab)