401(k) Paycheck Questions, Answered
Does contributing to a 401(k) lower my taxes?
Yes, if you contribute on a traditional (pre-tax) basis. Your contribution is subtracted from your wages before federal and state income tax is calculated, so you pay less tax today. Roth 401(k) contributions work differently — they're made after tax, so they don't lower your current paycheck taxes.
Does a 401(k) contribution reduce my Social Security or Medicare withholding?
No. Traditional pre-tax 401(k) contributions reduce your federal and state taxable wages, but they do not reduce the wages used to calculate Social Security and Medicare (FICA) taxes. Those are still calculated on your full gross pay.
How much can I contribute to my 401(k) in 2026?
For 2026, the IRS elective deferral limit is $24,500. If you're age 50 or older, you can contribute an additional $8,000 catch-up amount, for a total of $32,500. See our Annual Plan Limits page for the full set of current limits.
Why does my take-home pay drop by less than my contribution amount?
Because a traditional 401(k) contribution lowers the income tax withheld from that paycheck at the same time. The tax you save partially offsets the contribution, so the actual dent in your take-home pay is smaller than the dollar amount you're contributing. The calculator below shows the exact difference based on your own numbers.
What is a third-party administrator (TPA), and why does my plan have one?
A third-party administrator (TPA) is an independent firm that handles the day-to-day compliance, recordkeeping, and administrative work behind a retirement plan — such as annual nondiscrimination testing, Form 5500 preparation, and plan document maintenance — so the plan stays compliant with IRS and ERISA rules. The Stoller Company has served as a TPA for retirement plans since 1976.
The calculator below is provided for illustration purposes only. It uses simplified, estimated figures based on the 2026 IRS and California EDD withholding formulas and is not a substitute for a review of your actual pay stub, plan documents, or advice from a qualified tax professional.
401(k) Paycheck Calculator
Enter your gross wage, W-4 details, and 401(k) deferral to see how a contribution change affects your actual take-home pay.
Paycheck & Contribution
Federal (Form W-4)
State
Per-Paycheck Comparison
| Current | New | |
|---|---|---|
| Gross Pay | — | — |
| 401(k) Contribution | — | — |
| Est. Federal Income Tax | — | — |
| Est. State Income Tax | — | — |
| Est. FICA (SS + Medicare) | — | — |
| Take-Home Pay | — | — |
| Employer Match (est., not part of pay) | — | — |
Estimate only, based on 2026 IRS Publication 15-T (federal) and California EDD Method B (state) withholding formulas. FICA and Other Pre-Tax Deductions apply the same to both columns except where noted; 401(k) deferrals reduce federal/state taxable wages but not FICA wages.