Employer Match
A contribution your employer makes to your 401(k) or similar retirement plan based on how much you contribute, often matching 50% to 100% of the first 3% to 6% of your salary.
An employer match is additional money your employer contributes to your retirement account (typically a 401(k) or 403(b)) based on the amount you contribute. Common formulas include a dollar-for-dollar match on the first 3% of salary, or a 50-cent match on each dollar for the first 6%.
Not contributing enough to receive the full employer match is often called "leaving money on the table." A full employer match represents an immediate 50% to 100% return on your investment before any market gains. Financial advisors widely recommend contributing at least enough to capture the complete match.
Employer contributions are subject to a vesting schedule, which determines how much you get to keep if you leave the company before a certain number of years. Common vesting schedules include cliff vesting (100% ownership after 3 years) and graded vesting (increasing ownership over 2 to 6 years). Your own contributions are always 100% vested immediately.
Related Terms
401(k)
An employer-sponsored retirement savings plan that lets you contribute pre-tax income (or after-tax with Roth 401(k)). The 2025 employee contribution limit is $23,500.
Vesting
The process by which you gain ownership of employer contributions to your retirement plan over time. Your own contributions are always 100% vested immediately.
Catch-Up Contribution
Additional retirement plan contributions allowed for workers age 50 and older — $7,500 extra for 401(k) plans and $1,000 extra for IRAs in 2025.
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Use our free tool to calculate your employer match and see how it affects your taxes.