Why this is correct (Q4 — $2,550 employer contribution): This is a straightforward percentage calculation illustrating how employer matches translate to dollars. Step 1: compute the employee’s 6% of $85,000 = $5,100. Step 2: apply the employer’s 50% match to that $5,100: 0.5 × $5,100 = $2,550. (Short working line: 85,000 × 0.06 = 5,100; 5,100 × 0.5 = 2,550.) The result shows the annual employer contribution under the stated match formula. This example is useful because it demonstrates that matches are computed on the portion of salary you elect to defer, and the match percentage multiplies that contribution, not your entire salary.

Practical takeaway & planning uses: Use this pattern whenever you want to estimate how much an employer adds to your retirement each year. Running the numbers for different deferral rates helps you decide how much to defer to capture the full match or determine the marginal benefit of increasing your own contribution. Also compare the employer contribution to the plan’s vesting rules and fees — a healthy match is more valuable when it’s vested and invested in low-cost funds. Keeping a simple spreadsheet with salary, deferral rate, and match rules is an easy way to track the impact of pay changes or raises on total retirement inflows.