The $72,000 annual-additions ceiling generally combines regular employee deferrals and employer contributions. It is not $72,000 of profit sharing on top of a regular 401(k) deferral.
The key 2026 numbers
| Limit | 2026 amount |
|---|---|
| Regular employee elective deferrals | $24,500 |
| Annual additions, before eligible catch-ups | $72,000 |
| Compensation considered for allocations | $360,000 |
| Catch-up, generally age 50–59 or 64+ | $8,000 |
| Higher catch-up, ages 60–63 | $11,250 |
Annual additions are also limited to 100% of the applicable compensation. Catch-ups require eligibility and plan availability. The higher age-60–63 catch-up replaces the regular catch-up amount; the two are not added together.
Example: how the $72,000 ceiling is used
| Contribution | Amount |
|---|---|
| Regular employee deferral | $24,500 |
| Safe harbor nonelective contribution | $9,000 |
| Additional profit sharing | $38,500 |
| Total annual additions | $72,000 |
Employer contributions total $47,500, including the $9,000 safe harbor amount. The remaining profit sharing is $38,500. A match or other annual additions would reduce that remaining room.
What catch-ups can add
If eligible, an owner age 55 could add an $8,000 catch-up, bringing the illustrated total to $80,000. At age 61, an eligible $11,250 catch-up would instead bring it to $83,250. These totals assume enough compensation, plan permission and satisfaction of the other applicable rules.
A little more detail
For 2026, catch-ups generally must be Roth for participants whose prior-year FICA wages from the sponsoring employer exceed $150,000. This affects the tax character of the catch-up; it does not create extra employer contribution room. Payroll and the provider should confirm application to the participant.
Limits are only one part of the allocation
An owner may have statutory room for a contribution but still need additional employee funding to support it. New comparability testing, coverage, top-heavy obligations, the adopted formula and deduction rules can constrain the design.
Use these figures for the 2026 year only. Confirm contributions under other relevant plans and the correct compensation definition before issuing funding instructions. The owner contribution guide explains how to turn remaining room into a budget comparison.
Explore the next step
Try the free scenario calculator with hypothetical inputs, or compare more allocation examples. The methodology guide explains what the calculator does and does not test.
Sources & further reading
- IRS Notice 2025-67: 2026 retirement plan limits
- Treasury Regulation §1.401(a)(4)-8: cross-testing and the gateway
- IRS: choosing a profit-sharing plan
Educational content updated September 18, 2026. Examples are fictional; they illustrate funding choices and do not constitute final testing or plan-specific advice.