Pre-tax/Roth 401(k) limit – This is the maximum amount an employee can contribute on a tax-favored basis in any calendar year.
Catch-up limit – This limits how much “extra” an employee – who is or will be at least age 50 during the calendar year – can contribute on a tax-favored basis in the calendar year. This “extra” amount is often referred to as catch-up contribution.
For example, an employee turning age 50 during 2019 can contribute up to $25,000 to their 401(k) account on a tax-favored basis in 2019.
Annual addition limit – This limits the total amount that can be put into an individual’s account in any calendar year. Although, catch-up contributions are not included for purposes of this limit, all other employee contributions (pre-tax, Roth 401(k) and after-tax contributions) and all company contributions are considered.
Compensation limit – This is the maximum amount of compensation that may be considered as eligible by the plan. Once an employee has accumulated the eligible compensation limit (base, overtime, annual bonus, etc.) in a single calendar year, they can no longer contribute or receive company contributions in their RAI 401(k) Savings Plan account.