Independent payroll-schedule reference · Updated July 2026 Methodology · Submit a correction
Glossary term

401(k)

Employer-sponsored retirement plan via payroll.

Definition

A 401(k) is an employer-sponsored, defined-contribution retirement savings plan funded by employee payroll contributions, often with a partial or matching employer contribution. Traditional 401(k) contributions are pre-tax — they reduce current taxable income — and grow tax-deferred until withdrawal. Roth 401(k) contributions are post-tax but withdrawals (including growth) are tax-free in retirement subject to age and holding-period rules. 2024 employee contribution limits are $23,000 (or $30,500 with catch-up at age 50+). Employer matching is set per plan, commonly 50% on the first 6% of salary contributed.

Example

An employee contributing 6% of a $80,000 salary defers $4,800/year, often matched by another $2,400.

Related terms

  • Pay period — The recurring window of time covered by a single paycheck.
  • Pay frequency — How often paychecks are issued.
  • Payday — The calendar day wages are deposited.
  • In arrears — Wages paid after the pay period ends.
  • Biweekly — Every other week — 26 paychecks per year.
  • Semimonthly — Twice per month on fixed dates — 24 paychecks per year.

See also