Employer match
Also called: 401(k) match, matching contribution
An employer match is money your employer adds to your workplace retirement account when you contribute, following a formula in the plan, such as 50 cents for every dollar you put in on the first 6% of your pay.
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How it works
A match formula has two parts: the rate, meaning how much the employer adds per dollar you contribute, and the cap, meaning how much of your pay is eligible to be matched. Under “100% up to 3% of pay,” every dollar you contribute on the first 3% of pay is matched in full. Under “50% up to 6%,” each of those dollars earns 50 cents, so the most the employer adds is 3% of pay.
To receive the full match, you generally need to contribute at least up to the cap. Contributing less leaves part of it unclaimed, and contributing more doesn’t raise it. Your plan document sets how the match is calculated, for example each pay period or over the whole year, which matters if you change or pause contributions partway through the year.
The match lands in your account on top of your own contributions, but it may follow a vesting schedule, meaning part of it could be forfeited if you leave before working a set number of years. Your plan documents spell out the formula, what counts as eligible pay, when you become eligible, and how vesting works.
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Sources and further reading
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