We perform high-field magnetization measurements on the triangular lattice antiferromagnet Fe$_{1/3}$NbS$_2$. We observe a plateau in the magnetization centered at approximately half the saturation magnetization over a wide range of temperature and magnetic field. From density functional theory calculations, we determine a likely set of magnetic exchange constants. Incorporating these constants into a minimal Hamiltonian model of our material, we find that the plateau and of the $Z_3$ symmetry breaking ground state both arise from interplane and intraplane antiferromagnetic interactions acting in competition. These findings are pertinent to the magneto-electric properties of Fe$_{1/3}$NbS$_2$, which allow electrical switching of antiferromagnetic textures at relatively low current densities.