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?
For definitions of the columns in this report, refer to our Payroll Glossary.
If you have questions or need assistance, please contact Salaris Payroll Support. We’re here to help.