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How can I ensure I max out my contributions to hit the annual limit?
How can I ensure I max out my contributions to hit the annual limit?
Updated over 10 months ago

If you’d like to max out your annual 401(k) contributions while also taking full advantage of any applicable employer match offered for the year, you want to ensure you contribute from every paycheck and don’t max out early.

Calculating how much you'll need to contribute to max out

To calculate the estimated contribution amount you'll need to make from each paycheck to max out by the end of the year, simply subtract your current annual contribution total from the annual employee contribution limit, and divide it by the remaining number of paychecks for the rest of the year.

For instance, say you've contributed $18,000 so far for 2023, and the employee contribution limit is $22,500. In this case, you'd have to contribute another $4,500 for the year to max out. If there were just 6 paychecks left this year, then you'd need to contribute $750 per pay. The calculation is: (22,500-18,000)/6.

Where to view your contribution estimate with Guideline?

You can see an estimate of your projected contributions for the year within your Guideline dashboard. From the main page, click on the “Change contribution” button and view the Projected Contribution graph.

If it's showing that you will not hit the max, you can adjust your contribution rates, and see how it affects your Projected Contributions for the year. Please note that the contribution calculator presents an estimate based on payroll information provided by your employer, and may be different from what you are actually paid, including pay from bonus checks. Additionally, if you contributed to another 401(k) plan in the same calendar year, you must report those contributions on your dashboard, as they will count toward your annual deferral limit, which could impact your projected total.

Please note, if a contribution change is made too close to when your employer runs payroll, your new rate won’t be reflected until the following paycheck.

Can I make additional contributions outside my paychecks?

Because 401(k) contributions must be deferred before they have been paid to you, we cannot accept contributions made outside of payroll via personal checks or credit card.

How do owner’s draws contributions affect my limit?

If you receive self-employment income that is considered compensation for 401(k) plan purposes, you are eligible to contribute to your plan via owner’s draws. Note that contributions made via owner’s draws are still deferrals.

You may schedule an owner’s draw any time throughout the year up until December 31 and in any amount as long as it does not exceed the annual deferral limit as you are bound by the same limit as all other participants of the plan.

While W-2 employees will receive any applicable employer match contribution with every paycheck deferral, those who defer by way of owner’s draws will receive their match for the plan year once their income has been reported. However, owners likely will not know their exact compensation until their tax returns have been filed. You can learn more about employer contributions for owners here.

Please note that if you want owner's draws to be deposited in the next year, you are required to make your elective deferral contribution election for the plan year on or before December 31. Learn how to make this election in your administrator dashboard.

Please also be advised that while owners have the same annual limits as rank and file employees, if any owners are considered highly compensated employees or key employees, corrective action may be required if their contributions are disproportionate compared to their non-highly compensated or non-key employee counterparts and the plan does not meet nondiscrimination testing.


This information is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein.


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