Roth 401(k) plans are typically matched at the same rate as traditional 401(k) plans. Matching contributions provided by an employer have historically been placed in a traditional 401(k)while employee contributions were held in Roth 401(k). The SECURE 2.0 Act changed that in December 2022, making it possible for employers to make matching contributions to employees’ Roth 401(k)s.

Traditional 401(k) vs. Roth 401(k)

A Roth 401(k) is a employer sponsored investment account is similar to a traditional 401(k) plan, except that contributions to the account are taxed up front rather than at the time of withdrawal. The account is funded with after-tax dollars: you contribute after the money has been taxed as income. Because you pay taxes now, rather than later, this account can be attractive to investors who expect to be in a tax category when they retire because they may want to avoid paying taxes on their investment he returns at that moment.

With a traditional 401(k), you make contributions with pre-tax dollars so more money comes in right from the start, giving you a larger amount to invest. Contributions reduce your taxable income in the year you make them, so they may move you into a lower bracket tax category. However, you have to pay taxes on both the initial investment and the investment returns accumulated over the years when the funds are withdrawn.

The Roth 401(k), on the other hand, allows you to make tax-free withdrawals as long as you’re age 59½ or older and five years have passed since you first contributed to the account.

Contribution limits

Contribution limits are the same for both traditional and Roth 401(k). Employees can contribute up to $23,000 to 401(k) accounts in 2024, with an additional recovery contribution of $7,500 allowed for those age 50 or older. The combined limit on employee and employer contributions for 2024 is $69,000 or 100% of the employee’s compensation, whichever is less. The exception is if the employee is age 50 or older: in this case, the limit is $76,500.

Limits increase annually to keep up with inflation and was adjusted for 2025. In 2025, employees can contribute up to $23,500 to 401(k) accounts, with an additional catch-up contribution of $7,500. Note that certain individuals may be eligible for a higher additional recovery amount.

overthrow

A traditional 401(k) plan can be converted to a Roth 401(k) plan, although you will pay taxes on the amount carried forward. Funds cannot be moved into a traditional 401(k) plan after money from any source is in the Roth 401(k). They can be cast to a Roth Individual Retirement Account (IRA)however.

Employer matches

If an employer matches contributions to traditional 401(k) accounts, it is standard for them to match contributions to Roth 401(k) accounts as well. The employer contribution has traditionally been placed in a traditional 401(k) plan so that it is taxable upon withdrawal. This changed with the passage SECURE 2.0 Act in December 2022.

There are two key types of employer matching: dollar for dollar and partial.

Dollar-for-dollar match

With a dollar-for-dollar match, your employer will match 100% of your contributions, generally up to a certain percentage of your salary. If your employer’s matching formula it’s a dollar-for-dollar match of up to 6% and you choose to contribute 4% of your salary to a 401(k), for example, your employer. will match that exact amount (4%). However, if you contribute 15% – which is the recommended amount – your employer will not exceed the 6% cap. It will not equal 9%.

Partial match

Partial matching is when your employer it matches some, but not all, of your contribution, usually up to a percentage of your salary. According to Vanguard, the most common matching formula is $0.50 per dollar for the first 6% of salary.

conclusion

Matching contributions to a Roth 401(k) are typically deposited into a separate, traditional 401(k) account. This means that when you take a retirement withdrawal, those funds (plus earnings) will be taxed by the IRS as income, unlike funds in a Roth 401(k). Note that thanks to the SECURE Act (December 2022), an employer can instead match an employee’s contributions to their Roth account rather than a traditional account.