In U.S. workplace retirement plans, what is an employer’s contribution made to match an employee’s own contribution called?

An employer’s contribution made to match an employee’s own contribution is called an employer matching contribution.

In a common 401(k) arrangement, an employer might contribute a specified percentage of pay when the employee contributes to the plan. For example, an employer could match 50 cents for each dollar contributed up to a stated salary percentage. The exact formula is set by the plan document and varies among employers.

Matching money is separate from the employee’s elective salary deferral, although both may enter the same retirement account. A plan may also impose a vesting schedule, meaning an employee gradually earns ownership of some or all employer contributions over time.

A match is not guaranteed by every workplace plan, and contributing enough to receive the full available match depends on the plan’s formula and the employee’s contribution rate. Tax treatment and withdrawal rules depend on the plan type and applicable law.