Companies often offer various benefits, like competitive retirement savings plans, to attract and retain employees. One of these benefits is a company 401(k) match. This is essentially "free money" for employees who contribute the required amount. Let’s look at three examples of major companies that offer above-average 401(k) employer matching contributions.
Key Takeaways
- Companies are not required to offer a 401(k) match, but they often use this benefit to attract and retain workers.
- The average employer contribution match was 4.6% in 2024, and the median (middle-of-the-road) match was 4.0%, according to a Vanguard study.
- Major companies that provide some of the biggest matches include ConocoPhillips, Philip Morris International, and Amgen.
Companies with Some of the Best Employer Matches
The average employer match in 2024 was 4.6% and the median employer match was 4.0%, according to a Vanguard study. Companies that provide more than these amounts are more likely to stand out in the job market.
ConocoPhillips (COP), Philip Morris International Inc. (PM), and Amgen Inc. (AMGN) are among the companies with some of the best matching contributions.
ConocoPhillips
ConocoPhillips, a multinational crude oil producer, offers a 6% match to employees after they contribute at least 1% of their income to their 401(k). Then, the company provides up to another 6% in discretionary contributions based on company performance and other factors. According to the company’s plan, ConocoPhillips’ goal is to provide at least a 3% discretionary contribution, for a total matching contribution of 9%.
Philip Morris International Inc.
Philip Morris International, a multinational tobacco company, first matches up to 5% of an employee’s eligible contributions. Then, it contributes an additional 7% to 15% of the employee’s compensation based on the company’s annual performance.
Amgen Inc.
Once hired, each Amgen employee is automatically enrolled into the 401(k) plan to contribute 5%, an amount that they can adjust. Amgen will match 100% of the first 5% that the employee contributes to their plan. Additionally, the company automatically contributes up to 5% of eligible compensation each pay period, regardless of whether the employee makes a contribution to their 401(k) or not.
How Companies Can Offer a 401(k) Match
Tax-advantaged retirement plans like 401(k)s are regulated by the Internal Revenue Service (IRS) and the Employee Retirement Income Security Act (ERISA). Non-Roth accounts allow employees to contribute a percentage of their paycheck on a pretax basis and then choose their investments. The contributions are not subject to federal income tax until they’re withdrawn at a later date, typically during retirement years. (With a Roth account, employees contribute post-tax dollars so that when funds are withdrawn in retirement, the withdrawal is tax-free.)
Companies can contribute to their employees’ 401(k) plans in several ways, such as dollar-for-dollar matches or partial matches. With dollar-for-dollar matches, the employer will contribute the same amount of money that the employee does, up to a certain amount. For example, if an employee contributes $100 per paycheck, the employer will also contribute $100.
With partial matches, the employer can contribute a percentage of what the employee contributes. For example, if an employee contributes $100 per paycheck, the employer may offer a 50% contribution, or $50.
Companies can offer a matching benefit or other types of contributions. Then, they can deduct their contributions up to the IRS limit. To receive tax deductions, companies cannot offer different contribution matches to management from what they offer to their employees.
Companies cannot contribute more than the legal limit, which is 100% of the employee’s annual pay or $69,000 (or $76,500 if the employee is age 50 or older) as of 2024, whichever is the lower value.
Are Companies Required to Offer a 401(k) Match?
Employers are under no obligation to provide a retirement plan or a matching 401(k) contribution. However, many companies provide a 401(k) match as a benefit to employees.
What Is Considered a Good Employer Match?
According to a 2024 study conducted by Vanguard, the average 401(k) match in the previous year was 4.6%, and the median match was 4.0%. About 1 in 7 plans provided $0.50 per dollar on the first 6% of employee compensation.
Should You Always Try to Maximize Your Contributions to Match the Employer Offer?
Maximizing your 401(k) contributions can help you get the most out of your employer’s match. When you contribute up to your employer’s matching limit, you avoid leaving free money on the table, so to speak. Consider your current financial situation, including your debt obligations and cash flow, as you determine whether to maximize your contributions to match the employer's offer. Even if you have high-interest credit card debt, for example, it may make sense to contribute to the plan to get the employer match, since a 1-for-1 match is a 100% return.
The Bottom Line
Companies decide how much of a 401(k) match they want to offer, or whether to offer any retirement plan at all. In today’s competitive job market, many companies are offering more matching contributions to attract and retain employees. If you are applying for a new job, consider the benefits that the company provides, including how much they offer in 401(k) matching contributions.
FAQs
Can an employer offer a 100 percent 401(k) match? Yes, an employer can offer a 100 percent match to an employee contribution, up to a certain percentage of their annual income.
Which company gives the highest 401k match? ›
What Are The Companies With Best 401k Match Plan?
- Edmunds. Edmunds, a prominent name in consumer vehicle guides, offers a 100 per cent match for employee's pre-tax and Roth 401k contributions, up to 6 per cent of their eligible salary.
- Flatfile. ...
- Activision Blizzard. ...
- Visa Inc. ...
- Uber. ...
- Comcast. ...
- Bosch USA. ...
- Samsung Electronics.
Can an employer offer a 100 percent 401(k) match? Yes, an employer can offer a 100 percent match to an employee contribution, up to a certain percentage of their annual income.
What is the maximum 401k match by employer? ›
Typically, a 401(k) plan may offer an employer match of 50 cents on the dollar, up to 6 percent of a worker's salary, which would be the equivalent of 3 percent of compensation. To take advantage of the full match, employees would have to defer 6 percent of their salary toward the 401(k) plan.
What is the most common 401k employer match? ›
The average 401k employer match in 2024 is between 4% and 6% of compensation. The most common structure is 50% partial match contributions up to 6% of salary.
Which company is best for a 401k? ›
- ADP. : Best for businesses that already use ADP's payroll services.
- Charles Schwab. : Best for businesses looking for inexpensive costs and extended customer service hours.
- ShareBuilder 401k. ...
- Fidelity Investments. ...
- T. ...
- Merrill Edge. ...
- Employee Fiduciary. ...
- Vanguard.
So, Google has a very generous employer match on your 401k contributions. Currently, they will match 50% of your contributions all the way up to the IRS limit, which for 2023 is $22,500. So, what this means is that for every dollar that you contribute to the 401k, Google will contribute 50 cents.
How much does Costco match a 401k? ›
Making sense of the data below:
| Company | Match | Eligibility |
|---|
| Best Buy | 4% of compensation | 12 months of service |
| Black Rock | 8% of compensation up to $5,000 per year | Immediately |
| Cisco | 4.5% of compensation | Immediately |
| Costco | Up to $500 per year if under one year of service. 3% to 9% match after 1,000 hours of service. | 90 days of service |
31 more rowsJan 16, 2024
401(k) savings plan3,7 includes both Traditional (before-tax) and Roth (after-tax) options. Deloitte matches $0.50 for every dollar you contribute, up to the first 6% of your eligible pay per year (e.g., Deloitte contributes 3% of your eligible pay annually if you contribute at least 6%).
How do I get a full employer 401k match? ›
To get the maximum amount of match, you have to put in 6% of your salary. If you make $50,000, for example, and you decide to contribute the full 6%, that would be $3,000 a year — usually taken out gradually, with each paycheck — and then your employer would contribute half of that, or $1,500.
If you receive compensation in 2024 that's more than $155,000 and you're in the top 20% of employees as ranked by compensation, your employer can classify you as a highly compensated employee. 32 Compensation includes overtime, bonuses, commissions, and salary deferrals made toward cafeteria plans and 401(k)s.
Can I contribute 100% of my salary to my 401k? ›
Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: $23,000 in 2024 ($22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and 2021), or $30,000 in 2023 ($27,000 in 2022; $26,000 in 2020 and 2021) if age 50 or over; plus.
Can an employer take back their 401k match? ›
If you elect to defer only the minimum amount to your retirement savings account, employer contributions may represent a significant amount of your balance. There are circumstances under which an employer has the right to take back some or all of its matching contributions to an employee's 401(k) plan.
Do any companies do 100% 401k match? ›
"Your employer could match 100% or even a dollar amount based upon some formula, but this can get expensive and normally owners want their employees to take some ownership of their retirement while still providing an incentive," says Dan Stewart, CFA®, president, Revere Asset Management Inc., in Dallas, Texas.
Which bank has the best 401k plan? ›
Compare Best Solo 401(k) Companies
| Solo 401(k) Provider | Investment Specialty | 401(k) Loans Supported |
|---|
| Fidelity Investments Best Overall | General | No |
| Charles Schwab Best for Low Fees | General | No |
| E*TRADE Best for Account Features | General | Yes |
| Vanguard Best for Mutual Funds | Vanguard Mutual Funds | No |
1 more rowAmazon 401(k) Plan
For every $1 of employee contribution you make (up to 4% of your eligible pay), Amazon will contribute an additional $0.50 to your account in the form of matching contributions. You can get up to a 2% match.
Is 6% 401k matching good? ›
This is especially valuable if your employer matches your contributions. Many employers match as much as 50 cents on the dollar, on up to 6% of your salary. Most advisors recommend contributing enough to get the maximum match. Turning down free money put towards your retirement nest egg doesn't make sense.
What is a high company 401k match? ›
Anything above 5% of compensation is considered a good employer match. As you'll see below, some companies offer employer matching up to 25% of compensation. Of course, employees are bound by the 401k contribution limits set by the IRS each year, which is $23,000 ($30,500 if age 50+) in 2024.
How do I get the most 401k match? ›
Follow these tips to maximize your earning potential:
- Join your employer's plan. ...
- Start saving early. ...
- Contribute enough to get your employer's match. ...
- Save beyond the company match, if possible. ...
- Be mindful of annual contribution limits. ...
- Avoid early withdrawals.
