401(k)

401(k)s are a form of tax advantaged account sponsored by your employer. As such, 401(k)s can only be contributed to via payroll contributions. Generally speaking, 401(k) contributions are managed through the trustee and conveyed back to your payroll to apply the withholdings from your paycheck.

Contributions to 401(k)s can be a few different types: Employee, Employer match, and After tax. Additionally, they can have different tax treatments Roth, traditional, or after tax.

You'll notice that "after tax" is both a contribution type and a tax treatment. More about that in the section below.

Contribution limits

Contribution limits for 2025 is, in total, $70,000. This number is comprised of the following:

• $23,500 - Available traditional or direct Roth contributions made by the employee (herein referred to has employee contribution)
• Employer contributions - Employers may contribute to your 401(k). It is common to require a contribution from the employee to trigger the contribution (such as a % of your salary)
• After tax contributions - Some employers allow you to fill up the space beyond employee contribution that is not tax advantaged (it is taxed going in, and the gains are taxed coming out, so no benefit of Traditional or Roth). This seems like a negative, but it is used for megabackdoor Roth.

Mathematically, your after tax limit is calculated as such:

$70,000 - $23,500 - employer match = after-tax limit