United States 
Canada (EN) 
México 
France 
Deutschland 
United Kingdom 
Quick Hits
- The elective deferral limit for 401(k) and 403(b) plans will increase to $23,500 for 2025, and the catch-up contribution limit will remain at $7,500 for most employees but will rise to $11,250 for employees who achieve ages 60 to 63 in 2025.
- The limitation on compensation that can be taken into account under tax-qualified retirement plans will increase to $350,000 for 2025.
- The threshold for determining highly compensated employees will increase to $160,000.
The 2025 adjustments were comparable to those made for 2024. The increases shown below are effective January 1, 2025.
| Internal Revenue Code (IRC) or Regulation Section | 2025 | 2024 |
| Annual compensation limit: IRC §§ 401(a)(17) / 404(l) | $350,000 | $345,000 |
| Elective deferral limit: IRC §§ 402(g)(1) and 457(e)(15) | $23,500 | $23,000 |
| Catch-up contribution limit: IRC § 414(v)(2)(B)(i) For employees ages 60-63: For other employees: | $11,250 $7,500 | N/A $7,500 |
| Defined benefit plan limit: IRC § 415(b)(1)(A) | $280,000 | $275,000 |
| Defined contribution plan limit: IRC § 415(c)(1)(A) | $70,000 | $66,000 |
| Highly compensated employee threshold: IRC § 414(q)(1)(B) | $160,000 | $155,000 |
| Employee stock ownership plan (ESOP) limits: IRC § 409(o)(1)(C) | $1,415,000 $280,000 | $1,380,000 $275,000 |
| Key employee dollar limit in top-heavy plan: IRC § 416(i)(1)(A)(i) | $230,000 | $220,000 |
| SIMPLE maximum contribution limit: IRC § 408(p)(2)(E) | $16,500 | $16,000 |
| SIMPLE catch-up contribution limit: IRC § 414(v)(2)(B)(ii) For employees ages 60-63: For all other employees: | $5,250 $3,500 | $3,500 |
| Simplified employee pension (SEP) minimum compensation: IRC § 408(k)(2)(C) | $750 | $750 |
| SEP maximum compensation: IRC § 408(k)(3)(C) | $350,000 | $345,000 |
| Control employee: § 1.61-21(f)(5)(i) | $140,000 | $135,000 |
| Control employee: § 1.61-21(f)(5)(iii) | $285,000 | $275,000 |
| Social Security taxable wage base | $176,100 | $168,600 |
The IRS makes cost-of-living adjustments annually in response to inflation. Each limit is rounded to a whole number, usually the nearest $500 or $1,000, as prescribed by the Employee Retirement Income Security Act (ERISA).
Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group regularly provides legal updates in response to developments in employee benefits law. Please see the Employee Benefits and Executive Compensation blog for more information
Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts
Katrina M. Clingerman is a shareholder in the Indianapolis office of Ogletree Deakins, and she is a member of the firm’s Employee Benefits and Executive Compensation Practice Group.
Thomas P. Gerard is a 2024 graduate of Georgia State University College of Law and is awaiting admission to the State Bar of Georgia.
