Employee deferrals and a capped employer match
This model calculates your salary-based contribution, adds an employer match only up to its stated salary cap, and compounds both monthly. The match percentage is applied to the eligible portion of your own contribution rather than to all salary.
Nine thousand nine hundred dollars in year one
On a $90,000 salary, an 8% employee contribution is $7,200. A 50% match up to 6% of salary adds $2,700, making $9,900 in the first year; at 7% for 25 years the projection is about $668,309.
Plan rules are more detailed than an annual percentage
The formula holds salary, contribution rate, match formula, and investment return constant. Many plans use a dollar cap, vesting schedule, eligibility wait, payroll timing, or a match calculated per pay period rather than annually.
Vesting and limits can reduce an apparent match
Read the plan document before treating a stated match as available money. Leaving employment can forfeit unvested employer contributions, and IRS contribution limits may constrain the employee amount even when a percentage looks affordable.
Workplace matching is the point of this projection
This page is for workplace-plan contributions and matching. A retirement savings calculation is better for an account without an employer formula or for combining several personal savings sources.
Tax treatment and withdrawals need separate analysis
Taxes, Roth versus traditional treatment, loans, withdrawals, fees, salary raises, and catch-up contributions are beyond this simplified projection. Verify payroll elections and current plan limits through the employer or plan administrator.
Front-loading can miss payroll matching
Match formulas can have cliffs and payroll-level limits. For example, a plan might match 50% of the first 6% each paycheck, so front-loading contributions could leave later paychecks without matching dollars. The simplified annual formula is useful for orientation, but the benefits portal and summary plan description control the actual employer contribution.
Roth and traditional deposits have different cash effects
Traditional and Roth contributions can produce the same displayed account deposit while affecting take-home pay and later tax treatment differently. The calculator does not choose between them. Use payroll estimates and plan guidance to see the contribution's cash-flow effect rather than assuming every dollar saved has the same after-tax cost.
The match is capped before it is compounded
Eight percent of $90,000 is $7,200. The match applies only to the first 6% of salary contributed, or $5,400, and 50% of that eligible amount is $2,700. The first-year total is therefore $9,900, not 50% of the full $7,200. The IRS uses the same capped-match logic in its examples and says the plan document and summary plan description state the conditions for receiving a match.
Payroll timing can make an annual formula optimistic
A plan may calculate matching contributions on every paycheck rather than on the year's total. Someone who contributes heavily early and reaches an employee limit could receive no match on later paychecks unless the plan makes a year-end true-up. The annual calculation is useful for a scenario, but the pay-period formula, eligible compensation definition, and true-up provision come from the actual plan materials, not from a generic percentage field.
Vesting separates account balance from owned balance
Employee salary deferrals are generally fully vested, while employer matching contributions can be subject to the plan's vesting schedule. A statement can show $2,700 of match credited in the first year even if a departure before a required service period would leave less owned. The IRS explains that the plan disclosure documents contain the specific vesting schedule. For a job-change comparison, model a vested and an unvested case separately.
Current statutory limits are not supplied by this form
Contribution limits, catch-up eligibility, Roth treatment, loans, distributions, and nondiscrimination corrections can change the amount actually deposited. A salary percentage also may not apply to bonuses or commissions. Check the current election screen and summary plan description before acting. This page illustrates how a stated match and constant return compound; it is not payroll advice, a tax calculation, or a statement of plan benefits.
Salary growth is absent by design
Holding salary at $90,000 means the modeled employee contribution and cap-based match stay constant in dollars. A raise can increase both, while an unpaid leave can reduce them. If compensation is expected to change, build separate periods instead of treating the 25-year total as a payroll forecast.
The account balance is not take-home-pay math
Traditional and Roth elections can place the same stated contribution into the account while changing current withholding and future tax treatment. Employer matching rules may also differ by contribution type. The calculator does not estimate a paycheck; compare the election with payroll tools and plan materials before using it as a cash-budget number.
Verify the plan before changing payroll
The match formula in a benefits portal may use eligible compensation, per-paycheck caps, waiting periods, and a true-up that a broad annual scenario cannot show. Confirm those details and the vesting status in the summary plan description. The calculation is useful for asking the right payroll question, not for overriding the plan record. The employer's current plan document remains the source of truth for match eligibility and ownership. Payroll confirmation is more authoritative than a percentage inferred from a marketing description of the benefit.
Source for plan-rule caveats
IRS matching-contribution guidance illustrates capped match arithmetic; its vesting guidance explains the distinction between employee and employer contributions. The plan document controls the actual terms.
Irregular pay may not earn the same match
If compensation includes bonus, commission, or irregular pay, confirm whether the plan matches those amounts. A percentage based only on base salary can overstate or understate the employer deposit, particularly where payroll elections apply differently to bonus checks.