What debt rate would make me skip the match?

One above the match rate, so above 50% on the default figures. That is not a rate consumer credit reaches; even payday lending is structured as fees rather than an APR you would enter here. In practice the answer is that there is no ordinary debt worth skipping a match for.

Does the tax deduction make contributing better than it looks?

Not on its own. A take-home dollar buys about $1.28 of pre-tax contribution in a 22% bracket, which looks like free leverage, but a traditional 401(k) is taxed on withdrawal, and under a flat rate the two cancel exactly. The reason to contribute is the match, not the deduction. Change the tax rate in the calculator and the verdict does not move.

What if my employer match does not vest for years?

Then it is worth less than the calculator says, and if you expect to leave before vesting it may be worth nothing. This model treats the match as yours immediately. Check your plan’s vesting schedule, cliff vesting at three years is common, and so is graded vesting over five or six. Once the match is filled, the retirement calculator projects where the balance ends up.

Should I contribute more than the match?

Against a high-rate debt, usually not. Past the match cap the extra dollar earns your expected market return, not the match, and a guaranteed 22.9% from clearing a card beats an uncertain 7%. Set the match to zero here to see that case: the calculator will tell you to clear the debt. The credit card payoff calculator shows what that debt costs while it lasts.

What about an emergency fund?

This calculator does not model one and takes no view on it. It compares expected dollars, and by that measure cash earns almost nothing. What it cannot see is that having no buffer is what puts the balance back on the card in the first place, how much of one to build first is its own comparison.

Should I Take the 401(k) Match or Pay Off Debt?

Should I take the 401(k) match or pay off debt first? Take the match. A 50% match is a 50% guaranteed return on the day you contribute, and no consumer debt charges that. This works out the exact rate at which the answer would flip.

Example numbers

The verdictfrom an example

Take the match. It pays 50% on the day you contribute, and your debt charges 22.90%.

Worked on $9,000 at 22.9%, $500 a month spare, 50% match up to $400. Change anything below to use yours.

Your debt rate22.90%

50.00%The bar to beat

← Take the match firstClear the debt first →

The match is worth: 50%
Your debt charges: 22.90%

The figures behind it

The match is worth: 50%; Immediately, guaranteed, on every dollar you contribute up to the cap.
Your debt charges: 22.90%; A guaranteed return too, but a smaller one, if it is below the match.
A take-home dollar buys: $1.28; Of pre-tax contribution, because it was never taxed at 22%.
Take the match first: $49,998; Net worth after 5 years: retirement after tax, less any debt left.
Clear the debt first: $48,266; Debt free in 1 year, 2 months, then everything to retirement.
Taking the match is ahead by: $1,731; Free employer money collected: $9,360 against $7,292, both after tax.

What you still owe on each plan

Years from today

Take the match firstClear the debt first

Payment scheduleShow

The table scrolls sideways

Item	Match first	Debt first
Debt cleared in	2 years, 3 months	1 year, 2 months
Interest paid	$2,509	$1,313
Employer match collected	$9,360	$7,292
Retirement after tax	$49,998	$48,266
Net worth at month 60	$49,998	$48,266

What this result assumes

Both plans spend the same amount every month, and once the debt is gone the whole former payment goes to retirement in both. That is what makes the horizon comparable.
The comparison is in take-home dollars. A pre-tax contribution was never taxed, so $1 of take-home buys $1.28 of contribution at your bracket, and is taxed on the way out, which cancels it. The match does not cancel, which is the whole point.
The match is treated as vesting immediately. Many plans vest over several years, and leaving before then forfeits some or all of it.
Contribution limits, catch-up contributions, true-up provisions and any Roth 401(k) option are not modelled.

Methodology

Reviewed September 1, 2026

Why the match usually wins, and by how much

An employer match is a return, and an unusually good one: it arrives immediately, it is guaranteed, and it does not depend on the market doing anything. A 50% match pays 50% on the day you contribute. Paying down a credit card is a guaranteed return too, but at the card’s rate — 22.9% on the default figures here. Fifty is larger than twenty-three, and no amount of compounding changes which is larger.

That is why the bar this calculator solves for is the match rate itself. Your debt has to charge more than the employer pays for clearing it first to be the better move, and consumer debt essentially never reaches 50%.

The usual objection — that the match is locked up for decades while the debt is costing you now — is real but does not change the ranking. Both plans are run to the same horizon on the same monthly outflow, so the money that goes to the match is not money the debt never sees; it is money the debt sees slightly later.

Take-home dollars, and why the tax cancels

The comparison has to be in take-home dollars, because that is the currency the decision is actually made in. A dollar of take-home clears a dollar of debt. But a pre-tax 401(k) contribution is made from income that was never taxed, so one take-home dollar buys 1 ÷ (1 − t) dollars of contribution — $1.28 in a 22% bracket.

That leverage looks decisive and is not, because a traditional 401(k) is taxed on the way out. Under a flat marginal rate the two effects cancel exactly:

1 take-home → 1/(1 − t) gross → ×(1 + m) with the match → ×(1 − t) at withdrawal → (1 + m) take-home.

So the deduction is not the reason to contribute. The match is. The calculator carries the tax through anyway, so you can see it cancel rather than being told it does — and the test suite asserts that changing only the bracket does not change the verdict.

The comparison

Both plans have the same total monthly outflow: the debt’s scheduled payment plus your spare cash. On the match-first plan, enough take-home goes to the 401(k) to fill the match cap and the rest goes to the debt. On the debt-first plan everything spare goes to the debt.

Once the debt is retired, the entire former payment — scheduled amount and spare cash together — goes to retirement on both plans. Leaving that step out is the standard flaw in comparisons of this shape, and it silently penalises whichever plan clears the debt sooner by deleting the payment it just freed up.

Terminal net worth is the after-tax 401(k) balance less any debt still outstanding at the horizon, which is the month the debt would have run to at its minimum payment.

Assumptions

The employer match vests immediately. Many plans vest over three to six years, and leaving early forfeits the unvested part.
Both plans spend the same amount each month and are measured on the same date.
The marginal tax rate is the same when contributing and when withdrawing.
Returns arrive smoothly at the rate entered. Volatility and sequence risk are not modelled.
The 401(k) is traditional and pre-tax. A Roth 401(k) is not modelled.
Annual contribution limits, catch-up contributions and employer true-up provisions are ignored.
Early-withdrawal penalties, loans against the balance and required minimum distributions are ignored.
The debt rate is fixed. Card rates are variable and can be raised.
No emergency fund requirement is imposed before either plan starts.

Sources

Common questions

Should I contribute to my 401(k) or pay off credit card debt first?: Contribute enough to get the full employer match, then attack the debt with everything else. A 50% match is a 50% guaranteed return on the day you contribute, and no consumer debt charges 50%. Beyond the match, the ranking flips: a 22.9% card beats an uncertain 7% market return, so anything above the match should go at the balance.
What debt rate would make me skip the match?: One above the match rate, so above 50% on the default figures. That is not a rate consumer credit reaches; even payday lending is structured as fees rather than an APR you would enter here. In practice the answer is that there is no ordinary debt worth skipping a match for.
Does the tax deduction make contributing better than it looks?: Not on its own. A take-home dollar buys about $1.28 of pre-tax contribution in a 22% bracket, which looks like free leverage, but a traditional 401(k) is taxed on withdrawal, and under a flat rate the two cancel exactly. The reason to contribute is the match, not the deduction. Change the tax rate in the calculator and the verdict does not move.
What if my employer match does not vest for years?: Then it is worth less than the calculator says, and if you expect to leave before vesting it may be worth nothing. This model treats the match as yours immediately. Check your plan’s vesting schedule, cliff vesting at three years is common, and so is graded vesting over five or six. Once the match is filled, the retirement calculator projects where the balance ends up.
Should I contribute more than the match?: Against a high-rate debt, usually not. Past the match cap the extra dollar earns your expected market return, not the match, and a guaranteed 22.9% from clearing a card beats an uncertain 7%. Set the match to zero here to see that case: the calculator will tell you to clear the debt. The credit card payoff calculator shows what that debt costs while it lasts.
What about an emergency fund?: This calculator does not model one and takes no view on it. It compares expected dollars, and by that measure cash earns almost nothing. What it cannot see is that having no buffer is what puts the balance back on the card in the first place, how much of one to build first is its own comparison.

All retirement →