When it comes to saving for retirement, your employer may be helping you build savings faster by matching some or all of your contributions to the plan. But not every employer offers the same formula — and some employers may even include fixed contributions, or require you to contribute a minimum amount to participate.
Here’s what you need to know to understand how your plan works.
Where to Find Your Matching Formula
When enrolling in your plan or adjusting your contribution level, click “See matching formula” on the contribution screen. This will give you a detailed breakdown of:
- Your contribution – how much you're choosing to put into the plan
Employer match – how much your employer will add based on what you contribute
Common Types of Matching Structures
Percentage-Based Matching
Your employer matches a percentage of your earnings based on how much you contribute.
Example: You contribute 3% of your pay, and your employer matches 3% — this is called a 1:1 match.
Note: Some employers offer partial matching instead.
Example: Your employer matches 50% — so if you contribute 6%, they contribute 3%.
Flat Dollar Matching
Instead of percentages, some employers offer a fixed dollar amount each pay period.
Example: You contribute $100, and your employer matches that with $100.
Tiered Matching
Some plans use tiers, where the matching formula changes depending on how much you contribute.
Example: Your employer matches 100% on the first 4% of your contributions, then 50% on the next 2% — meaning to get the full match, you'd need to contribute 6%.
Tiered Matching
Some employers offer tiered contributions, where matching rates increase or change at different contribution levels. Below are a few examples to help you understand how this might look in your plan.
Example 1: 100% up to 2%, then 50% up to 4%
In this type of plan, your employer uses two tiers to calculate how much they'll contribute based on what you put in:
- They match 100% of your contributions up to 2% of your pay
- Then they match 50% of any additional contributions, up to a total of 4%
Example 2: 50% on the first 3%, 100% on the next 2%
In this plan design, your employer offers:
- A 50% match on the first 3% you contribute
- A 100% match on the next 2% you contribute
Example 3: Base + Matching Tier
In this plan, your employer contributes even if you don't — and will contribute more if you choose to participate.
Here’s how it works:
- Employer automatically contributes 3% of your pay, even if you don’t contribute anything
- On top of that, they will match 100% of your contributions up to 3%
- This means the maximum employer contribution is 6% when you contribute 3%