What is 401 Eligible Wages?

401 Eligible Wages refer to the portion of an employee's earnings that can be considered for contributions to a 401(k) retirement plan. This typically includes base salary, bonuses, and other forms of compensation, but may exclude certain types of income like overtime or specific fringe benefits, depending on the plan's rules. Employers use this figure to determine how much can be contributed to the employee’s retirement account, subject to IRS limits. Understanding eligible wages is crucial for maximizing retirement savings and ensuring compliance with plan regulations.