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401K Limit...What does it include?

The IRS states below:

In addition, the amount of your compensation that can be taken into account when determining employer and employee contributions is limited. In 2009 and 2010, the compensation limitation is $245,000.

My question is does the 245K only apply to Regular (worked) earnings or does it also include any type of bonus payments?


  • I've not looked, but there are at least three (if I recall correctly) limitations on contributions one is the salary limitation you mention. As to what is included in wages - that depends on the specific plan provisions. Some plan provisions include bonuses and some don't. You have to read the plan documents to see what is included or talk to your plan administrator.