IRC 401(a)(17) caps the pay a qualified plan can take into account. For 2026 the cap is $360,000, up from $350,000 in 2025. Pay above it is ignored for every plan purpose: benefit formulas, the high-3 average and the percentage tests that limit deductions.
In a cash balance plan it matters in two places. First, the 415(b) limit is the lesser of a dollar amount and 100% of your high-3 average pay, and each year's pay in that average is capped. Someone paid above the cap for years has a 2026 high-3 average of $351,667, well above the $290,000 dollar limit, so for them pay is not what binds. Second, the 6% of pay allowed for 401(k) profit sharing under the combined deduction limit is measured on capped pay, so it tops out at $21,600.
For S and C corporation owners the pay in question is W-2 salary, so salary above $360,000 adds nothing to the plan. For sole proprietors and partners it is earned income. See how much you can contribute.