Should you count the 401(k) match when comparing job offers?
Yes, count it. A 401(k) match is part of what a job pays you, and two offers with the same salary can be a few thousand dollars a year apart once you add it in. But count it in dollars, worked out from the salary on the offer letter, and only the dollars you'll actually earn.
That means three checks: how the match formula is written, whether you'll contribute enough to get all of it, and how long you have to stay before it's yours.
This guide is for planning and education, not financial or tax advice. Every number below is a made-up example.
The match is figured on your salary
A match formula has two parts: a rate and a limit. "100% up to 4% of pay" means the employer adds a dollar for each dollar you contribute, on contributions up to 4% of your salary. "50% up to 6%" means they add 50 cents per dollar, on contributions up to 6% of your salary.
So the dollar value is:
match = rate × the part of your contributions that falls inside the first (limit)% of your salary
Example, on an $80,000 salary:
- 100% up to 4%: 4% of $80,000 is $3,200. Contribute at least that and the match is 100% of $3,200, or $3,200 a year.
- 50% up to 6%: 6% of $80,000 is $4,800. Contribute at least that and the match is 50% of $4,800, or $2,400 a year.
The formula with the bigger percentage in it pays $800 less. Read both numbers in the formula, not just the one in the headline.
One catch on "salary": the formula runs on whatever the plan defines as pay. For most people that's the base salary on the offer letter, but some plans count bonuses, commissions or overtime and some leave them out. The plan's summary document says which, and it's worth asking for before you compare.
The common mistake is to run the percentage against something other than salary, most often the IRS annual contribution limit. That can land several times too low. The IRS limit caps how much you can put in each year. It isn't what the employer's formula is based on, and the employer's match doesn't count against that personal limit anyway. It counts toward a much higher combined limit instead.
Comparing two offers
Here are two example offers. Same job, different employers.
| Offer A | Offer B | |
|---|---|---|
| Salary | $92,000 | $88,000 |
| Match formula | 50% up to 6% | 100% up to 5% |
| You contribute to get the full match | 6% = $5,520 | 5% = $4,400 |
| Full match per year | $2,760 | $4,400 |
| Salary + match | $94,760 | $92,400 |
| Vesting on the match | 3-year cliff | Immediate |
On salary alone, A is $4,000 ahead. Add the match and the gap shrinks to $2,360. A still wins on paper. Then vesting gets a vote.
Vesting: when the match becomes yours
Your own contributions are always yours. The employer's match often isn't, at first. A cliff schedule gives you nothing until a set date and then all of it. A graded schedule hands it over in steps, say 20% a year.
Federal rules cap how slow a match can vest: at most a 3-year cliff, or a 6-year graded schedule that can sit at 0% after the first year and reach 100% after the sixth. Most safe-harbor matches, a common plan type, have to vest immediately, so ask whether the plan is one. Vesting usually counts years of service, typically years in which you work at least 1,000 hours, so starting late in the plan year can push a cliff out. Leave before you're vested and the unvested match goes back to the plan.
Run the two offers over different stays (salary plus vested match, no raises, no investment growth):
- Leave after 2 years. A: $184,000 in salary, match forfeited, so $184,000. B: $176,000 in salary plus $8,800 of match, so $184,800. B is ahead by $800.
- Stay 3 years. A vests: $276,000 plus $8,280 of match is $284,280. B: $264,000 plus $13,200 is $277,200. A is ahead by $7,080.
The offer that looks better on paper only wins if you reach the cliff. If you aren't sure you'll be there in three years, value an unvested match at less than face. Some people value it at zero.
You only get it if you contribute enough
The match follows your contributions. In Offer A, putting in 3% instead of 6% means $2,760 of your own money and a match of 50% of that, which is $1,380. Half the match is left on the table, and A's salary-plus-match drops to $93,380.
That matters for the comparison because the full match isn't free to collect. Offer A asks you to set aside $5,520 a year to get it. Offer B asks for $4,400. If you can't afford the higher contribution, don't count the higher match.
Per-paycheck matching and the true-up
Many employers match each paycheck on its own, not on the year. That's fine if you contribute the same share every pay period. It bites if you don't.
Say you take Offer B and contribute 10% for the first half of the year, then stop. Over the year you've put in $4,400, which is exactly 5% of $88,000. But in the first half, the match only covered 5% of the $44,000 you earned then: $2,200. In the second half you contributed nothing, so there was nothing to match. You end the year with $2,200, not $4,400.
Some plans fix this with a true-up: after year end, they compare your total contributions to the annual formula and pay the difference. With a true-up you'd get the other $2,200. Without one, it's gone.
The same thing can happen to high earners who contribute heavily early and reach their annual IRS limit before December. Ask HR, or check the plan's summary plan description, for whether matching is per paycheck and whether there's a true-up.
What else belongs in total pay
The match is one line. Health insurance premiums can swing a few thousand dollars between employers. So can bonuses, especially whether they're guaranteed. When people weigh a $70k offer against holding out for a better one, they're asking a question the salary line can't answer by itself. Put every line you can price into the same table and compare the totals.
Keep in mind match dollars aren't spendable now. They land in a retirement account, usually as pre-tax money that's taxed when you take it out, even if your own contributions go to a Roth. A dollar of match isn't the same as a dollar of salary today, but over a long horizon it compounds like any other invested dollar.
Seeing what the match adds up to
Simura's Max investments scenario takes your salary, your monthly contribution, the match rate and the match limit as a percent of salary, and works out the match the same way this guide does: the rate applied to the contributions inside the first limit% of your salary. It then projects the balance forward with the match included, so you can see what each offer's match is worth after 10 or 20 years instead of just this year.
The Simura simulator doesn't model vesting schedules or true-ups, so apply those checks yourself before you put an offer's match in.