How To Calculate Tax Amounts Withheld On Mixed Pre-Tax & Roth 401(k) Contributions, & Match?

Most 401 k plans now allow for Roth (after-tax) personal deferrals to a 401 k plan. If a person makes a Roth contribution, there is no calculation to be made at all. If the personal deferral is pre-tax, that amount will be a tax deductible expense – again no calculation for withholdings. Matches cannot be Roth, they must be “traditional”. This will be a tax deductible to the sponsoring entity.

Utilizing such a plan allows for a much higher match but this is dependent on a number of factors and should be calculated by a tax professional. For a regular 401 k, the match is determined by the sponsoring company and the plan administrator.