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2026 tax year · IRS Notice 2025-67; IRC §1411(b)

Mega backdoor Roth calculator

Find your after-tax 401(k) room under the §415(c) limit, pace contributions so you keep the full employer match, and compare against a taxable account. Every formula is on the methodology page.

Compensation & Household

Before 401(k) deferrals. W-2 Box 1 leaves them out, so it runs low.

50+ unlocks catch-up outside §415(c).

401(k) Deferrals & Employer Match

Standard 2026 limit is $24,500 (§402g).

Share of pay the match applies to.

Other company contributions that count toward §415(c).

Plan Rules & True-Up

The employer settles the match on your annual deferral at year-end.

Some plans cap after-tax contributions (e.g. 10% or 15% of compensation).

Investment Assumptions

Realized capital gains rate

Inflation & Purchasing Power

Discounts future amounts by the inflation rate below.

After-Tax 401(k) Room

$42,100

IRC §415(c) $72,000 annual additions ceiling

Total 401(k) Additions

$29,900

$24,500 deferral + $5,400 employer

Tax Savings vs Brokerage

+$130,559

Over 20 yrs at 7% return

Constraint in effect: Your after-tax capacity is limited by the statutory §415(c) dollar ceiling ($72,000 for 2026).
$24.5K$5.4K$42.1K§415(c) Cap ($72,000)$0$10K$20K$30K$40K$50K$60K$70K$80K
Tap a segment for details.Remaining After-Tax Capacity: $42,100
How the §415(c) limit works

Total contributions to the plan (your elective deferrals, employer match, and profit sharing) can't exceed $72K or 100% of pay. Voluntary after-tax contributions can fill whatever room is left, and converting them to Roth is the mega backdoor.

How the mega backdoor Roth works

Most employees are familiar with the standard employee elective deferral limit ($24,500 in 2026 under IRC §402(g)). However, the overall retirement plan limit under IRC §415(c) is significantly higher: $72,000 (or 100% of compensation, whichever is less).

If your employer plan permits voluntary after-tax contributions and in-plan Roth conversions (or in-service distributions), you can contribute the difference between the §415(c) ceiling and your existing contributions (deferrals + employer match + profit sharing) as after-tax dollars, converting them immediately to Roth for lifelong tax-free compound growth.

The three 401(k) contribution buckets

Understanding the mega backdoor requires distinguishing between the three distinct sub-accounts inside a 401(k) plan:

1. Elective deferrals (Pre-Tax or Designated Roth)

$24,500 limit

Governed by IRC §402(g). You choose either pre-tax (tax-deductible today) or designated Roth (after-tax today, tax-free withdrawals).

2. Employer contributions (Match & Profit Sharing)

Plan defined

Contributions funded by your employer. Subject to the IRC §401(a)(17) compensation cap ($360,000 in 2026).

3. Voluntary after-tax (Non-Roth)

Up to $72,000 total ceiling

Governed by IRC §415(c). Dollars are contributed after-tax. When converted immediately to Roth, all future investment earnings become permanently tax-free.

Conversion pathways: In-plan conversion vs. in-service rollover

Once voluntary after-tax contributions land in your 401(k), they must be converted to Roth to prevent investment earnings from accumulating as taxable ordinary income.

Automated in-plan Roth conversion (IRR)

Authorized by the Small Business Jobs Act of 2010. Your plan administrator automatically converts each after-tax payroll contribution to a designated Roth 401(k) subaccount inside the same plan on the day of deposit.

In-service rollover to Roth IRA

Under IRS Notice 2014-54, after-tax contributions can be distributed directly to your Roth IRA outside the plan. Any pre-tax earnings that accrued before rollover can be sent cleanly to a Traditional IRA.

Paycheck pacing, true-up matches & compensation limits

Executing a mega backdoor Roth requires understanding three critical plan mechanics:

  • • The front-loading match hazard: If your employer calculates matching contributions on a per-paycheck basis and does not offer a true-up provision, maxing out your $24,500 deferral early in the year means $0 contributions in later pay periods — permanently forfeiting employer matching dollars.
  • • The IRC §401(a)(17) compensation cap: For 2026, compensation above $360,000 cannot be considered when calculating employer match percentages.
  • • SECURE 2.0 §414(v)(7) Roth catch-up mandate: For employees aged 50+ who earned more than $150,000 in prior-year FICA Box 3 wages, catch-up contributions must be designated Roth deferrals. Catch-up limits ($8,000 standard, or $11,250 for ages 60–63) sit on top of the $72,000 limit.

What that looks like in dollars

In the starting scenario above — an employee earning $180,000 who defers $24,500 and receives a 50% employer match up to 6% of pay ($5,400):

Total 401(k) additions from deferrals and match equal $29,900. Subtracting this from the $72,000 statutory ceiling leaves $42,100 of available after-tax contribution room for the year.

Contributing $30,000 annually to a mega backdoor Roth over 20 years instead of a taxable brokerage account saves over $130,559 in accumulated dividend taxes, turnover capital gains taxes, and 3.8% NIIT.

Common questions

What is a mega backdoor Roth 401(k)?

A mega backdoor Roth allows you to contribute beyond the standard employee elective deferral limit ($24,500 in 2026) by making non-deductible after-tax contributions up to the IRC §415(c) annual additions ceiling ($72,000 in 2026) and immediately converting those funds to Roth via an in-plan Roth conversion or in-service distribution to a Roth IRA.

What three plan features does my employer 401(k) need?

To execute a mega backdoor Roth, your 401(k) plan must permit: (1) voluntary after-tax contributions beyond standard deferrals, (2) in-plan Roth conversions or in-service distributions to a Roth IRA, and ideally (3) automated in-plan conversions upon payroll contribution to prevent after-tax earnings from accumulating taxable gains.

How does IRC §415(c) calculate my after-tax capacity?

IRC §415(c)(1) caps total annual additions at the lesser of $72,000 (for 2026) or 100% of compensation. Total additions include your employee elective deferrals ($24,500), employer matching contributions, employer profit sharing, and your voluntary after-tax contributions. Your remaining after-tax room equals the ceiling minus all other additions.

What is the employer match true-up provision, and why does it matter?

Without a true-up provision, if you max out your elective deferrals ($24,500) early in the year, you contribute $0 in remaining pay periods and forfeit the employer match for those pay periods. A plan with a true-up feature calculates match annually at year-end, ensuring you receive 100% of your earned match regardless of when you hit the limit.

What is the SECURE 2.0 Roth catch-up mandate?

Under IRC §414(v)(7) (effective 2026), if your prior-year FICA Box 3 wages from your employer exceed $150,000, any catch-up contributions you make at age 50+ ($8,000 standard, or $11,250 for ages 60–63) must be made as designated Roth contributions rather than pre-tax deferrals. Catch-up contributions sit outside the §415(c) limit.

Does the pro-rata rule apply to mega backdoor Roth 401(k) conversions?

No. The IRA pro-rata rule under IRC §408(d)(2) applies only to Traditional, SEP, and SIMPLE IRAs. 401(k) after-tax contributions and in-plan Roth conversions are segregated by your plan administrator in a separate after-tax subaccount and are not tainted by pre-tax IRA balances.

What is the difference between a Roth 401(k) and After-Tax 401(k)?

A Roth 401(k) is an employee elective deferral subject to the annual $24,500 limit (for 2026 under §402(g)). An After-Tax 401(k) is a non-Roth voluntary contribution that goes into a separate subaccount subject to the broader $72,000 §415(c) ceiling. While earnings in an unconverted After-Tax 401(k) grow tax-deferred, converting them immediately to Roth via the mega backdoor makes all subsequent growth 100% tax-free.

How does IRS Notice 2014-54 protect mega backdoor Roth rollovers?

IRS Notice 2014-54 allows you to split an in-service distribution from your 401(k), sending after-tax contribution basis directly to a Roth IRA (tax-free) while rolling pre-tax earnings to a Traditional IRA without triggering pro-rata tax or taxes on gains.

Where to go from here

This tool models one employee's after-tax 401(k) room and multi-year compound growth. These cover related tax planning strategies.