Use this article to understand annual 401(k) contribution limits, catch-up contributions for those 50 and older, and how to adjust your contribution rate in your Gusto Retirement account.
Each year, the Internal Revenue Service (IRS) sets what's known as the "annual deferral limit," which dictates the maximum amount you can contribute across all your employer-sponsored retirement plans. This limit applies to pre-tax and Roth employee contributions for 401(k), 403(b), Starter 401(k), SARSEP, and SIMPLE IRA plans.
Any contributions you receive from your employer, like matching or profit sharing, do not count toward this total.
Your contribution limit depends on the type of Gusto 401(k) plan you have. Select your plan type below to see the applicable limits for 2026.
The annual participant deferral limit for a standard 401(k) plan is $24,500 for 2026.
If you are over the age of 50, you are also eligible to make catch-up contributions. The additional contributions are intended to help those nearing retirement catch up and set aside more earnings.
For 2026, here are the total employee contribution limits for standard 401(k) plans:
Deferral limit
Catch-up limit
Total
Under age 50
$24,500
N/A
$24,500
Aged 50 to 59
$24,500
$8,000
$32,500
Aged 60 to 63
$24,500
$11,250
$35,750
Aged 64 and over
$24,500
$8,000
$32,500
If you have a Starter 401(k) plan, the maximum you can contribute to that account is $6,000 for the year.
If you are over the age of 50, you are also eligible to contribute an additional $1,000 as catch-up contributions to a Starter 401(k).
For 2026, here are the total employee contribution limits for Starter 401(k) plans:
Deferral limit
Catch-up limit
Total
Under age 50
$6,000
N/A
$6,000
Aged 50 and over
$6,000
$1,000
$7,000
If you contribute to more than one employer-sponsored plan, for instance, you have a Starter and a standard 401(k), then the standard 401(k) deferral limits would apply across all your retirement accounts.
If you exceed these limits, then you may be eligible to receive a refund of the additional funds, taking into account any gains or losses incurred.
Check out this article to learn more about what happens if you exceed the annual deferral limit.
While you may want to contribute your entire paycheck to your 401(k), required federal and state withholding typically prevents this.
Pre-tax contributions: The highest rate of compensation you may be able to defer is 92.35% for most states. Some states, like California, may only allow up to 91.45% to cover additional state-required withholdings, like California's state disability insurance (SDI).
Roth (after-tax) contributions: The highest rate of compensation you may be able to defer is 68.67% to accommodate federal taxes and other withholdings.
If you enter 100% as your contribution rate, payroll may automatically adjust your rate to the highest allowable amount. However, not all providers can do this, and for some, a deferral rate of 100% can cause payroll processing errors. We suggest using a lower rate or checking with payroll first to confirm the maximum contribution you should elect.
Important: Contributing a high percentage of your paycheck to your 401(k) can cause you to quickly reach the allowable annual contribution limit and potentially lose out on employer match contributions.
You can set up or change your per-paycheck contribution (deferral) rate at any time from your Gusto Retirement dashboard by following the instructions below.
To change your contribution rate:
Sign in to your Gusto Retirement dashboard and go to your contributions using one of these options:
Sign in to Gusto and go to Benefits > Active Benefits > 401(k) > Manage.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Sign in directly at the Gusto Retirement sign-in page.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
Open the Gusto Retirement mobile app and sign in.
Then, select the Contributions tab, or from the Overview page, scroll to the Contributions section and select Manage.
If you have more than one Gusto Retirement account, select the associated plan you'd like to make changes to.
Within the Contributions screen, type in the percentage or dollar amount you'd like to contribute per paycheck.
As you enter your deferral amounts, your estimated contributions per pay period and for the year will be calculated within the sections at the top of the page, based on your salary history to date.
If you'd like to opt out of contributing, simply enter 0% or $0 into the pre-tax and Roth contribution amounts.
When you're happy with your new contribution amount, select Save changes toward the bottom of the screen.
Heads up: If you change your contribution rate too close to when your employer runs payroll, your new rate will be reflected on the following payroll run. You can contact your employer or payroll department directly to confirm when your company runs payroll.¹
All contributions should be fully attributed to your 401(k) account up to seven business days after your pay date.¹ Please note, holidays may add a day to the processing timeline.
You can review contribution history on the Transactions page of your 401(k) dashboard. To see details and amounts, click the Payroll link for any specific transaction.
If contributions were deducted from your paycheck and are not appearing in your 401(k) account, please reach out to our 401(k) participant support team for further assistance.
¹ If your employer uses a payroll provider other than Gusto or a Gusto Embedded provider (HiBob or HR for Health), there may be a delay in when contributions settle, and your rate change is applied within payroll. For last-minute changes, you should check with your company's payroll department to confirm that the contribution changes are reflected before they process or upload payroll.