If your 401(k) plan matches per paycheck and has no true-up provision, filling your contribution limit early costs you employer match. On a $200,000 salary contributing 20% of every paycheck, that is $4,000 a year of match you never receive.
The limit arrives in pay period 15 of 24. Your contributions stop there, and because the match is calculated on what you contributed that period, the match stops too. The last 9 payslips of the year carry no match at all. Nothing is wrong and nobody has made a mistake: it is simply how a plan without a true-up works.
What a 401(k) true-up actually is
A true-up is a plan provision that recalculates your employer match at the end of the year on your annual totals, instead of paycheck by paycheck, and pays you the difference.
Most plans do not work that way by default. They match what you contributed this pay period, in this pay period. That is fine for most of the year and it breaks at the moment your contributions stop, because the match is attached to the contribution rather than to the year.
Hit the annual contribution limit in October and your November and December payslips contain no employer match, because they contain no contribution for the match to attach to. You did not contribute less over the year. You contributed the same maximum as a colleague who spread it evenly, and you were paid less for it.
A plan with a true-up looks at 31 December, works out what your match should have been on the year as a whole, compares it with what was actually paid, and deposits the shortfall. Usually in the first quarter of the following year.
Plans are not required to offer one. It is an optional design feature, chosen by the employer when the plan document is written.
The default match is 100% of the first 5% of pay, which is the commonest formula. The contribution limit shown is the 2025 figure and changes most years, so check the current one before relying on it.
$4,000
You reach the limit in pay period 15 of 24, so 9 payslips carry no match at all. A plan without a true-up simply does not pay it.
- You contribute
- $23,500
- Match if the plan trues up
- $10,000
- Match if it does not
- $6,000
- Spread evenly, contribute(reaches the limit on the last payslip)
- 11.75% a paycheck
What front-loading your 401(k) costs
The cost rises with salary and with how fast you contribute, because both bring the limit forward. Four savers, all on a 100% match of the first 5% of pay, paid 24 times a year.
| Salary | Contributing | Limit reached | Payslips with no match | Match lost |
|---|---|---|---|---|
| $120,000 | 25% | period 19 of 24 | 5 | $1,250 |
| $150,000 | 20% | period 19 of 24 | 5 | $1,563 |
| $200,000 | 20% | period 15 of 24 | 9 | $4,000 |
| $300,000 | 15% | period 13 of 24 | 11 | $6,875 |
The pattern is worth reading twice. The saver on $300,000 contributes the smallest share of their pay of anybody in the table, 15%, and loses the most, $6,875. A higher salary fills the same fixed limit faster whatever percentage you choose, so the people most likely to be caught by this are the ones least likely to think of themselves as aggressive savers.
How to find out whether your plan has a true-up
There is no way to tell from your account balance, and support staff on a phone line frequently get this wrong. Three places, in the order worth trying:
- The Summary Plan Description. Every plan must give participants one, and it is the document that governs. Search it for "true-up", "true up" or "annual match". The matching contribution section will say whether the match is determined per payroll period or on a plan-year basis. Plan-year basis means you have a true-up.
- Your benefits team, in writing. Ask specifically: "Is the employer match calculated per pay period or annually, and does the plan provide a true-up?" Those words matter. "Do I get my full match?" invites a yes from somebody who has not understood the question.
- Your own payslips. If you have maxed out in a previous year, look at the match on your final payslips of that year and then at your account in the first quarter of the next one. A true-up shows up as a single employer deposit with no matching contribution from you.
If you cannot get a straight answer, assume there is no true-up and contribute evenly. Spreading contributions costs you nothing if the plan turns out to have one.
The fix costs nothing
Contribute at a rate that reaches the limit on the last payslip of the year rather than in the autumn. On the $200,000 salary above that is 11.75% a paycheck instead of 20%. The same $23,500 goes in, and the match rises from $6,000 to $10,000.
You are not saving less. You are spreading identical contributions across every payslip so that every payslip earns its match. The calculator above prints this figure for your own salary as you change it.
When front-loading is still the right call
Contributing early is not automatically a mistake. There are three situations where it beats spreading:
Your plan has a true-up. Then the timing is irrelevant to the match, and getting money into the market sooner is a small advantage rather than an expensive one.
You are leaving mid-year. If you know you are resigning in July, contributions you have not made by then are contributions you will never make in that plan. Front-loading captures the limit while you still have access to it. Check the vesting schedule before you rely on the match itself.
Your employer does not match at all. With no match there is nothing to lose by timing, and earlier contributions have longer to compound.
Outside those three, spreading is almost always better, and the reason is worth stating plainly: an employer match is a guaranteed, immediate, risk-free return on your own money. Very little else in personal finance offers that, which is why leaving part of it behind is expensive in a way that a few extra months of market exposure does not make up for.
What to do if you have already missed it
Past years cannot be recovered. A plan without a true-up has not made an error, so there is nothing to correct and no claim to make. What you can do is stop it recurring:
- Change your contribution rate now, not in January. If you are partway through the year and on course to max out early, lowering your rate for the remaining periods pulls the date back towards December.
- Recheck it every January. The contribution limit changes most years, and a rate that landed on the last payslip last year will land somewhere else this year. So will a raise.
- Watch out after a pay rise. A percentage-based contribution rises with your salary, which brings the limit forward. This is the commonest way somebody who had it right last year gets caught this year.
- Ask for the provision. Adding a true-up is a plan amendment, not a favour, and at a smaller employer a well-argued request to HR or the plan sponsor is not unreasonable. It costs the employer money, so expect it to take time.
Where this fits with everything else
The true-up question only matters if you are contributing enough to reach the annual limit, so it sits near the end of a longer list. Getting the full match at all comes first, and there is more on how the formulas work in our guide to what counts as a good 401(k) match. The limits themselves, and how the employee and total limits differ, are covered in 401(k) contribution limits.
Two related traps apply at this contribution level. Contributing to more than one plan in a year, after changing jobs, can put you over the limit entirely, which is a different problem with its own fix: see excess 401(k) contributions. And if you were automatically enrolled and have never changed your rate, it is worth checking what that rate actually is, which our guide to 401(k) auto-enrolment covers.
How this is calculated
- Contribution limit $23,500, the elective deferral limit for 2025. It is adjusted most years, so check the current figure before acting on any of this. It is an input in the calculator for exactly that reason.
- Match of 100% on the first 5% of pay, the commonest formula in US plans. Yours may differ and both parts are inputs.
- 24 pay periods, which is twice a month. Weekly and fortnightly payrolls change the pay period the limit lands in but not the size of the loss.
- Salary spread evenly across the year. A large bonus paid in one period, or a mid-year raise, moves the date you reach the limit. If most of your contributions come out of a single bonus, treat the figures here as the shape of the problem rather than your exact number.
- Catch-up contributions are not included. Savers aged 50 and over have a higher limit, which pushes the date back and reduces the loss. Add your catch-up amount to the limit field to model it.
- The comparison is match only. Contributing earlier in the year gives your money longer in the market, which is worth something real and is not counted here. On the $200,000 example that would have to beat $4,000 of guaranteed employer money in a few months to be the better trade.
The calculator runs the year one pay period at a time rather than using a formula, because the limit is usually reached partway through a period and a closed form would have to guess at that final one. The figures on this page come from that same calculation, so the article and the tool cannot disagree.
Definitions of the elective deferral limit and of matching contributions come from the IRS guidance on 401(k) contribution limits. Your Summary Plan Description governs your own plan and takes precedence over any general description, including this one.
Frequently asked questions
What is a 401(k) true-up?
A plan provision that recalculates your employer match on your annual contributions rather than paycheck by paycheck, and pays you any difference at the end of the year. It exists to make sure people who reach the contribution limit early still receive the full match they earned.
How do I know if my 401(k) has a true-up?
Check the matching contribution section of your Summary Plan Description for the words "true-up" or for language saying the match is determined on a plan-year basis. If it says the match is determined each payroll period with no annual adjustment, there is no true-up. Asking your benefits team in writing is the reliable second option.
Am I losing money if my plan has no true-up?
Only if you reach the annual contribution limit before your final payslip. If you contribute at a steady rate that fills the limit across the whole year, every payslip gets its match and a true-up would add nothing. The calculator on this page shows which of the two you are.
Is a true-up required by law?
No. It is an optional plan design feature. Employers choose whether to include one when the plan document is drafted, and many do not.
When is a true-up paid?
After the plan year ends, once payroll totals are final. The first quarter of the following year is typical, though the plan document sets the deadline. It usually arrives as a single employer contribution with no employee contribution alongside it.
Do I have to still be employed to receive it?
Often yes. Many plans require you to be employed on the last day of the plan year to receive the true-up, which is worth checking before resigning in December. Your Summary Plan Description will say.
Does this affect 403(b) plans too?
The same mechanics apply wherever an employer matches per payroll period against an annual contribution limit, so yes, in principle. Match formulas are less common in 403(b) plans than in 401(k) plans, so check whether yours has one at all before worrying about its timing.