You are correct. The article incorrectly quoted the source:
"we’ll increase the company’s 401(k) match from 50 percent of the first 6 percent that employees defer, to 50 percent of all regular deferrals. With the current IRS regular deferral limit of $18,000, this means employees will have the opportunity for Microsoft to match their contributions up to $9,000 per year."
Nobody knows. Microsoft's own release makes no sense. You (and your employer, combined) cannot contribute more than $18,000 tax-free per year. It's either 100% match of $9,000 on your $9,000 to make $18,000, or it's 50% match of your $12,000 to make $18,000. It can't be both things that the press release says it is.
My best guess is that they meant to say they now match 100%, but we won't know for sure until they correct the press release.
Actually, employer contributions do not count towards the $18k maximum per year in contributions. This is the specific advantage of having a 401k match in the first place, as it allows employees to have more tax deferred savings than otherwise possible.
No. They are increasing from 50% of 6% to 50% of all deferrals. So the maximum before was like $540 if you put in $18,000. Now its $9000.
"Retirement readiness is an important part of overall financial wellness, so beginning Jan. 1, 2016, we’ll increase the company’s 401(k) match from 50 percent of the first 6 percent that employees defer, to 50 percent of all regular deferrals."
I don't think that's plausible. More likely the match was 50% of the first 6% of salary employees deferred. That would require an employee to earn $300,000 in order to see a maximum $9,000 match. Now an employee can receive the full match merely by deferring the maximum amount, regardless of their salary.
6% refers to 6% of salary, not 6% of deferrals. 401k contributions are measured in terms of percentage of pre-tax salary contributed, and the match is based on that.
Under the old scheme, you had to contribute at least 6% of your pre-tax salary to get the maximum match, which was 50% of whatever that value was. In other words, the maximum match was 3% of your salary, and you had to be contributing at least 6% of your salary to get that. Now, anything you contribute gets matched at 50%, regardless of what your salary is.
https://blogs.microsoft.com/blog/2015/08/05/the-employee-exp...