How to Calculate Roth 401(k) Withholding

Check your pay stub for your Roth 401(k) contribution amount.

Check your pay stub for your Roth 401(k) contribution amount.

A Roth 401(k) is among the retirement plans offered by employers, which make contributions with money withheld from participating employees' wages. Whereas a traditional 401(k) is funded with pretax dollars, a Roth 401(k)'s contributions are made in after-tax dollars. If you have the latter, knowing how to calculate the withholding helps you to determine whether you were correctly paid.

Step 1

Determine your gross income for the pay period. This is your entire pay before deductions. For example, your annual salary is $43,000 and you are paid biweekly. Divide $43,000 by 26 to arrive at biweekly gross earnings of $1,653.85.

Step 2

Identify the percentage of wages or flat amount that you have instructed your employer to withhold for your Roth 401(k) contribution.

Step 3

Subtract your Roth 401(k) contribution from your gross income. For example, your contribution is 5 percent. Multiply $1653.85 by 0.05 to arrive at $82.69.

Tip

  • Once you arrive at the maximum that the IRS allows you to contribute toward a Roth 401(k) for the year, your employer stops the withholding and resumes it at the start of the next year.

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.

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