Dollar for Dollar up to 5%
50 Cents on the Dollar up to 6%
Dollar for Dollar up to 3%
Custom Formula (enter below)
Understanding Your 401k Employer Match
A 401(k) employer match is essentially free money offered by your employer to help you save for retirement. When you contribute a portion of your salary to your 401(k) plan, your employer contributes an additional amount based on a predetermined formula. Understanding this formula and maximizing your contributions to get the full match is crucial for accelerating your retirement savings.
How Employer Matches Work
Employer matching contributions are typically calculated as a percentage of your own contributions, up to a certain limit. The most common formulas include:
Dollar for Dollar up to X%: For every dollar you contribute, your employer contributes a dollar, up to a specified percentage of your salary (e.g., "Dollar for Dollar up to 5%"). If you contribute 6% and the match is dollar-for-dollar up to 5%, your employer will contribute 5% of your salary.
X Cents on the Dollar up to Y%: For every dollar you contribute, your employer contributes a set amount (e.g., 50 cents), up to a specified percentage of your salary (e.g., "50 Cents on the Dollar up to 6%"). If you contribute 6% and the match is 50 cents on the dollar up to 6%, your employer will contribute 3% of your salary (0.50 * 6%).
The Math Behind the Calculator
Our 401k Matching Calculator simplifies this process. Here's how it works:
Your Contribution Amount: Your annual salary is multiplied by your contribution rate (as a decimal) to determine how much you contribute annually.
Your Contribution = Annual Salary * (Your Contribution Rate / 100)
Employer Match Calculation (Based on Formula):
Dollar for Dollar up to X%: The employer match is the lesser of your contribution amount or X% of your salary.
Match Amount = MIN(Your Contribution, Annual Salary * (X / 100))
X Cents on the Dollar up to Y%: The employer match is X% of your contribution, capped at Y% of your salary.
Match Amount = MIN(Your Contribution * X, Annual Salary * (Y / 100))
Custom Formula: This uses the provided 'rate per dollar' and 'cap percentage'.
Match Amount = MIN(Your Contribution * CustomMatchRate, Annual Salary * (CustomMatchCap / 100))
Total Annual 401k Savings: This is the sum of your contributions and the employer match.
Total Savings = Your Contribution + Employer Match
Why Maximize Your Match?
The employer match is one of the most generous benefits available to employees. Failing to contribute enough to receive the full match means leaving potential retirement savings on the table. Over time, this difference can amount to tens or even hundreds of thousands of dollars. This calculator helps you quickly see the impact of the employer match on your total retirement savings each year.
Example: If your annual salary is $60,000 and your employer matches dollar-for-dollar up to 5% of your salary, and you contribute 6%:
By contributing 5% or more, you receive the full $3,000 employer match. If you only contributed 4%, you'd miss out on $1,000 in free money.
function calculateMatch() {
var salary = parseFloat(document.getElementById("annualSalary").value);
var contributionRate = parseFloat(document.getElementById("contributionRate").value);
var selectedFormula = document.getElementById("matchFormula").value;
var customMatchRateInput = document.getElementById("customMatchRate").value;
var customMatchCapInput = document.getElementById("customMatchCap").value;
var resultDiv = document.getElementById("result");
resultDiv.style.display = "none"; // Hide previous result
if (isNaN(salary) || isNaN(contributionRate) || salary <= 0 || contributionRate < 0) {
resultDiv.innerHTML = "Please enter valid numbers for salary and contribution rate.";
resultDiv.style.backgroundColor = "#dc3545"; // Error color
resultDiv.style.display = "block";
return;
}
var yourContributionAmount = salary * (contributionRate / 100);
var employerMatchAmount = 0;
var formulaDescription = "";
var matchCapPercent = 0; // For standard formulas
if (selectedFormula === "dollar_for_dollar_up_to_5_percent") {
matchCapPercent = 5;
employerMatchAmount = Math.min(yourContributionAmount, salary * (matchCapPercent / 100));
formulaDescription = "Dollar for Dollar up to 5% of Salary";
} else if (selectedFormula === "fifty_cents_on_the_dollar_up_to_6_percent") {
matchCapPercent = 6;
var matchRate = 0.50;
employerMatchAmount = Math.min(yourContributionAmount * matchRate, salary * (matchCapPercent / 100));
formulaDescription = "50 Cents on the Dollar up to 6% of Salary";
} else if (selectedFormula === "dollar_for_dollar_up_to_3_percent") {
matchCapPercent = 3;
employerMatchAmount = Math.min(yourContributionAmount, salary * (matchCapPercent / 100));
formulaDescription = "Dollar for Dollar up to 3% of Salary";
} else if (selectedFormula === "custom") {
var customMatchRate = parseFloat(customMatchRateInput.replace(/[^0-9.]/g, '')); // Remove non-numeric chars except dot
var customMatchCap = parseFloat(customMatchCapInput);
if (isNaN(customMatchRate) || isNaN(customMatchCap) || customMatchRate < 0 || customMatchCap < 0) {
resultDiv.innerHTML = "Please enter valid numbers for the custom match rate and cap.";
resultDiv.style.backgroundColor = "#dc3545"; // Error color
resultDiv.style.display = "block";
return;
}
employerMatchAmount = Math.min(yourContributionAmount * customMatchRate, salary * (customMatchCap / 100));
formulaDescription = `Custom: ${customMatchRate.toFixed(2)} per $1 up to ${customMatchCap}%`;
}
// Ensure match doesn't exceed the contribution limit for that specific match type logic
// The Math.min() already handles this for the standard logic.
// For custom, it ensures the match doesn't exceed the cap percentage of salary.
// Also, ensure the match amount does not exceed the total contribution from the employee for that calculation step.
var totalAnnualSavings = yourContributionAmount + employerMatchAmount;
// Format numbers to two decimal places for currency representation
var formattedYourContribution = yourContributionAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedEmployerMatch = employerMatchAmount.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedTotalSavings = totalAnnualSavings.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
var formattedSalary = salary.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 });
resultDiv.innerHTML =
`Your Annual Contribution: $${formattedYourContribution} ( ${contributionRate.toFixed(2)}% of your $${formattedSalary} salary )` +
`Employer Match (${formulaDescription}): $${formattedEmployerMatch} ( This is free money! )` +
`Total Annual 401(k) Savings: $${formattedTotalSavings}`;
resultDiv.style.backgroundColor = "var(–success-green)"; // Success color
resultDiv.style.display = "block";
}
document.getElementById("matchFormula").addEventListener("change", function() {
var customMatchGroup = document.getElementById("customMatchGroup");
if (this.value === "custom") {
customMatchGroup.style.display = "flex"; // Use flex to maintain layout if needed, or block
} else {
customMatchGroup.style.display = "none";
}
});