What is employer matching?

Employer matching refers specifically to the practice where organizations contribute to an employee's retirement account, but only when the employee also puts money into that account. This is a common feature of retirement plans, such as 401(k) plans, where the employer provides a percentage match of the employee's contributions, thereby incentivizing saving for retirement.

This practice promotes employee participation in retirement savings plans since employees may be more likely to contribute if they know their employer will match a portion of their contributions. The matching can vary widely, with some companies offering a dollar-for-dollar match up to a certain percentage of an employee's salary, while others might offer a lower percentage match.

The other options do not accurately describe the concept of employer matching in the context of retirement plans. For example, sharing a health insurance plan does not involve contributions or matching. Similarly, matching sick days or employee wages based on performance does not reflect the financial contribution aspect inherent in employer matching related to retirement accounts.