"Your employer will match up to 10% of your compensation that you elect as pre-tax contribution. When you contribute to your plan, your employer matches 50% of the first 10% of your pay."
I don't get what the above statement mean really. I kind of understood the first statement. For example, if I make $100,000 per year, my employer can match upto 10% i.e., $10,000. What does the 50% of the first 10% of your pay mean?
It means however much of your pay you contribute, your employer will contribute half that much, with the employer's contribution capped at 5% of your pay (that is, 50% of 10%). If you make $100k, anything you contribute up to $10k will be matched at 50%. If you contribute the full $10k, your employer will contribute $5k (50% of what you contributed). If you contribute $6k, your employer will contribute $3k (again, 50% of what you contributed). If you contribute more than $10k, your employer will still only contribute $5k (50% of 10% of your pay is the cap on the employer contribution).
