Roth retirement plans are employer-sponsored accounts funded with after-tax contributions. Unlike traditional pre-tax plans, Roth contributions do not reduce taxable wages up front. Instead, qualified distributions in retirement — including investment gains — are generally tax-free.
This article explains Roth plan types, contribution rules, and reporting requirements.
Types of Roth plans
Plan Type | Who Offers It | Typical Employers |
Roth 401(k) | Private sector | General employers |
Roth 403(b) | Tax-exempt organizations | Public schools, certain nonprofits |
Roth 457 | Government and nonprofits | State/local governments, some nonprofit agencies |
Tax treatment
Roth contributions are made with after-tax dollars. This means:
Contributions are subject to federal income tax, Social Security, and Medicare at the time of withholding.
Qualified distributions are not taxed in retirement.
Employer matches, if provided, are pre-tax and taxed upon distribution.
Contribution limits (2025)
Limit Type | Amount |
Annual contribution limit | $23,500 |
Catch-up contribution (age 50+) | $7,500 |
Annual compensation limit (401(k)) | $350,000 |
Employer and employee contributions combined cannot exceed IRS limits.
Reporting on Form W-2
Plan Type | W-2 Reporting |
Roth 401(k) | Box 12 Code AA; check “Retirement plan” in Box 13 |
Roth 403(b) | Box 12 Code EE; check “Retirement plan” in Box 13 |
Roth 457 | Box 12 Code BB; check “Retirement plan” in Box 13 |
Employer match
Employers may choose to match employee Roth contributions.
Example: if the employee contributes 6% of wages, the employer may match 3%. Salaris records the employer match as a pre-tax contribution, which will be taxed when distributed.
Need help?
If you have questions or need assistance, please contact Salaris Payroll Support. We’re here to help.