How Do Employer Contributions Work?

Many employers add to your 401(k) through matching or profit-sharing contributions. Here's how it works.

• Matching: Your employer matches a portion of your contributions (e.g., 100% of the first 4% you contribute).

• Profit-Sharing: Your employer contributes a set amount regardless of your deferrals.

• Nonelective Contributions: Your employer contributes for all eligible employees, even if you don’t contribute.

• Most matches are deposited each payroll period.

• Profit-sharing or year-end bonuses may be contributed annually.

• Contribution timing varies—some employers deposit right away, others do so monthly or yearly.

• You may need to meet eligibility or service requirements before receiving contributions.

• Contributions may be subject to vesting (ownership over time).