Contribution Percentage Definition

A contribution percentage is the portion of your paycheck that you can opt to put into your workplace retirement plan. It typically refers to tax-deferred contributions to a 401(k), a 403(b) or a SIMPLE IRA.

If your employer offers to match some percentage of your contributions up to some level -- say, a dollar-for-dollar match up to 4% of your salary -- you would be well-advised to contribute enough to get the full match.