The common match formulas worked through on a $60,000 salary, what it really costs you to get the whole match, how vesting decides when it is yours, and the 2026 contribution limits.
A match is written as a rate and a ceiling: the employer adds a share of what you contribute, up to a percentage of your pay. Here is what three common formulas pay on a $60,000 salary:
| You contribute | 50% of the first 6% | 100% of the first 4% | 100% of 3%, then 50% of the next 2% |
|---|---|---|---|
| 3% ($1,800) | $900 | $1,800 | $1,800 |
| 4% ($2,400) | $1,200 | $2,400 | $2,100 |
| 6% ($3,600) | $1,800 | $2,400 | $2,400 |
The pattern is the same in every formula: once you contribute enough to reach the ceiling, contributing more does not raise the match. Below the ceiling, every extra dollar you put in brings more from your employer.
A traditional 401(k) contribution comes out before income tax, so it lowers your take-home pay by less than the amount saved. Moving from 3% to 6% on a $60,000 salary, in a state with no income tax, puts $1,800 more of your own money in the account and $900 more from the employer, and costs $1,584 of take-home pay a year.
Left invested, $1,800 a year of matching money grows to about $119,590 over 30 years at a 5% annual return, before any of your own contributions. That return is an assumption for illustration; real returns vary from year to year.
Your own contributions are always 100% yours. The employer's money can come with a vesting schedule. Federal rules allow at most a three-year cliff, where none of it is yours until three years of service and then all of it is, or a six-year graded schedule that starts at 20% after two years and adds 20% a year. Leave before vesting and the unvested part goes back to the plan.
The 2026 limit on what you can contribute yourself is $24,500, plus $8,000 more from age 50, or $11,250 more at ages 60 to 63. Employer matching money does not count toward that $24,500.
Limits are from the IRS's announcement of the 2026 figures. The average employer contribution is from Vanguard's How America Saves 2026, covering plans it administers. Take-home figures use the same 2026 federal tables as the paycheck calculator for a single filer in a state with no income tax.
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