The IRS annually adjusts the maximum amounts that employees can save in their 401(k) plans. This chart (borrowed from SHRM) shows the defined contribution plan changes.
|Defined Contribution Plan Limits||2019||2018||Change|
|Maximum employee elective deferral*||$19,000||$18,500||+$500|
|Employee catch-up contribution (if age 50 or older by year-end)**||$6,000||$6,000||No
|Defined contribution maximum limit, all sources||$56,000||$55,000||+$1,000|
|Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up||$62,000||$61,000||+$1,000|
|Employee compensation limit for calculating contributions||$280,000||$275,000||+$5,000|
|Key employees’ compensation threshold for nondiscrimination testing||$180,000||$175,000||+5,000|
|Highly compensated employees’ threshold for nondiscrimination testing||$125,000||$120,000||+5,000|
According to Investopedia:
For 2019, the maximum allowable contribution to a 401(k) account – including employee salary deferrals and after-tax Roth contributions, as well as employer matching and elective contributions – is $56,000, or 100% of employee compensation, whichever is lower. This is up $1,000 from 2018. With a $6,000 catch-up contribution, the maximum yearly contribution for 401(k) participants age 50 or older is $62,000 for 2019 (up by $1,000 from 2018).
It is important to communicate this information to your employees.