How Much Can You Contribute to a 403b?

A 403(b) plan serves as a retirement savings vehicle, primarily offered to employees of public schools, certain tax-exempt organizations, and ministers. These plans enable eligible individuals to save for their retirement years with significant tax advantages. Contributions and earnings within a 403(b) plan typically grow on a tax-deferred basis, meaning taxes are generally not paid until funds are withdrawn in retirement. Some plans also offer a Roth option, where contributions are made with after-tax dollars, allowing qualified withdrawals in retirement to be tax-free.

Employee Contribution Limits

Individuals participating in a 403(b) plan can contribute a portion of their salary, known as elective deferrals, into their retirement account. These contributions can be made on a pre-tax basis, reducing current taxable income, or as Roth contributions, which are made with after-tax money. For 2025, the standard employee elective deferral limit for a 403(b) plan is $23,500.

The employee contribution limit applies to the individual, not per plan. If an employee participates in more than one retirement plan, such as a 403(b) and a 401(k) or 457(b) plan in the same year, their total combined elective deferrals across all these plans cannot exceed this annual limit.

For example, if an employee contributes $15,000 to a 403(b) plan, they could only contribute an additional $8,500 to a 401(k) or 457(b) plan in the same year to stay within the $23,500 overall elective deferral limit for 2025. Employees should regularly check their contributions to ensure they do not exceed this threshold. Exceeding this limit can lead to taxable excess contributions that must be corrected.

Employer Contribution Limits

Employers offering 403(b) plans may also contribute to their employees’ retirement accounts. These employer contributions generally fall into two categories: matching contributions and non-elective contributions. Matching contributions are made by the employer based on a percentage of the employee’s own contributions. Non-elective contributions are made by the employer regardless of whether the employee contributes to the plan.

The specific rules and amounts for employer contributions are defined within the individual 403(b) plan document. These contributions are typically subject to vesting schedules, meaning an employee must work for a certain period to gain full ownership of the employer-provided funds. Employer contributions do not count against the employee’s personal elective deferral limit.

However, employer contributions are factored into the overall contribution limit for the plan, which combines both employee and employer amounts. Not all 403(b) plans include employer contributions, as this is at the discretion of the employer. Employees should consult their plan administrator to understand any employer contribution provisions that may apply to their account.

Overall Contribution Limits

Beyond the individual employee contribution limit, the IRS imposes an overarching limit on the total amount that can be contributed to a 403(b) plan from all sources, including both employee elective deferrals and employer contributions. This limit, often referred to as the Section 415(c) limit, also includes any after-tax non-Roth contributions made to the plan. For 2025, the total annual additions to a 403(b) account generally cannot exceed $70,000 or 100% of the employee’s includible compensation, whichever amount is less.

This limit applies across all defined contribution plans an individual participates in from all employers in a given year. This means that if an employee also has contributions made to a 401(k) or 401(a) plan, or certain 457(b) plans, in the same year, those contributions will count towards the $70,000 Section 415(c) limit.

For example, if an employee’s 403(b) receives $23,500 in employee deferrals and $40,000 in employer contributions, the total contribution is $63,500, which is within the $70,000 limit. If the employee also had contributions to another defined contribution plan, such as a 401(k), the sum of all contributions across all plans would need to remain at or below this $70,000 threshold. Careful tracking of all retirement contributions is necessary to avoid exceeding these limits.

Special Catch-Up Provisions

Certain individuals are eligible for special catch-up provisions that allow them to contribute more than the standard limits to their 403(b) plans. One such provision is the Age 50+ Catch-Up contribution. If an employee is age 50 or older by the end of the calendar year, they can contribute an additional amount beyond the standard elective deferral limit. For 2025, this additional catch-up contribution is $7,500, bringing the potential employee contribution limit to $31,000 for those aged 50 and over.

A separate catch-up provision unique to 403(b) plans is the 15-Year Rule Catch-Up. This rule may allow employees with 15 or more years of service with the same eligible employer to make additional contributions. The maximum additional contribution under this rule is the lesser of $3,000 or $15,000 reduced by amounts previously contributed under this rule. This provision has a lifetime maximum of $15,000 in additional contributions.

A new provision under the SECURE 2.0 Act, effective in 2025, allows those aged 60 to 63 to contribute an even higher catch-up amount of $11,250, replacing the $7,500 age 50+ catch-up for this specific age group if the plan permits. This change could bring their potential employee contribution to $34,750 for 2025.