Other 401k Contribution Limits
While most Americans will never be subject to them, there are additional rules and regulations for 401k contributions for certain individuals. These additional rules affect primarily business owners, and highly compensated employees. The 401k earnings maximum compensation that can be used for contributions is $245,000. That does not mean that there is a 401k earnings maximum of $245,000 to be able to contribute at all, just that income above $245,000 does not count for 401(k) purposes.
For those falling in the category of 401k highly compensated, the total contributions made to all accounts cannot exceed $49,000 for 2010. This includes all employer contributions, matching, profit sharing, and the employee’s own contributions. For example, if an employee received a $25,000 profit sharing bonus in their 401(k) and the plan has a one for one match, the employee cannot contribute more than $12,000 during 2010 and still get the company match.
$25,000 bonus + $12,000 contribution + $12,000 match = $49,000.
In addition, contributions made to retirement accounts may never exceed 100% of compensation. This prevents employees from earning a small taxable salary and collecting a huge tax-deferred employer contribution to their 401k or other retirement plan.
If you want to contribute more toward your retirement, you may want to consider a non-deductible IRA contribution.