What Is 401(k) on a Pay Stub? Pre-Tax, Roth, and Contribution Limits
A 401(k) line on a pay stub records money connected to an employer-sponsored retirement plan. An employee contribution normally reduces take-home pay. A traditional 401(k) contribution is generally excluded from federal income-tax wages now, while a Roth 401(k) contribution is made after federal income tax. An employer match may appear separately and normally does not reduce the employee’s net pay.
Payroll labels are not universal. Read the code together with its section, the employee or employer marker, and the current and year-to-date amounts.
401(k) on a pay stub usually means part of an employee’s pay was directed to a workplace retirement plan. Traditional contributions generally lower federal income-tax wages but not Social Security or Medicare wages. Roth contributions do not lower current federal taxable wages. An employer match is employer-funded and normally does not reduce net pay.
If a deduction is missing or wrong, keep the original statement and request a correction from payroll or the plan administrator. Do not edit, backdate or recreate a historical employer record.
What a 401(k) Line Means on Your Pay Stub
A 401(k) is a workplace retirement plan. When an employee elects a percentage or dollar amount, payroll withholds that contribution from the paycheck and records it as a deduction. The money is intended for the plan account. It is not a tax sent to the government, and it is not the same as an IRA contribution made outside payroll.
| Possible label | Common meaning | What to verify |
|---|---|---|
| 401K, 401(k), RET | Workplace retirement contribution; often traditional unless another label says Roth | Plan election and payroll legend |
| 401K EE, EE 401K | Employee contribution | Current amount, YTD amount and net-pay reduction |
| 401K ER, ER MATCH | Employer contribution or match | It normally should not reduce employee net pay |
| ROTH, ROTH 401K | Designated Roth employee contribution | It is generally made after federal income tax |
An employer or payroll provider can use a custom code. If the label is unclear, check the payroll portal legend, benefit election and Summary Plan Description before assuming the tax treatment.
Traditional 401(k) vs Roth 401(k) vs Employer Match
These lines can appear near one another, but they do not affect the paycheck in the same way. For broader context, compare pre-tax and post-tax deductions.
| 401(k) line | Reduces net pay? | Reduces federal income-tax wages now? | Reduces Social Security or Medicare wages? |
|---|---|---|---|
| Traditional employee deferral | Yes | Generally yes | No |
| Roth employee deferral | Yes | No | No |
| Employer match or nonelective contribution | Normally no | Normally no current payroll effect | Normally no current payroll effect |
A traditional 401(k) is called “pre-tax,” but that phrase needs context. It generally reduces wages used for federal income-tax withholding. It does not remove the contribution from Social Security and Medicare wages. A Roth employee contribution is included in current federal taxable wages as well as Social Security and Medicare wages.
Some plans can permit eligible vested employer matching or nonelective contributions to be designated Roth. Their reporting differs from an ordinary traditional employer match, so use the plan document and year-end tax record rather than guessing from a shortened pay-stub label.
A $2,500 Pay-Period Example
Suppose an employee earns $2,500 in gross pay and contributes 6%, or $150. This example isolates the retirement line. Actual federal withholding depends on Form W-4 information, pay frequency and other payroll details. State treatment can differ.
| Pay-stub measure | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Gross pay | $2,500 | $2,500 |
| Employee contribution | $150 | $150 |
| Federal income-tax wage before other adjustments | $2,350 | $2,500 |
| Social Security wage before other adjustments | $2,500 | $2,500 |
| Medicare wage before other adjustments | $2,500 | $2,500 |
Both contributions remove $150 from cash pay. The difference is the federal income-tax wage used in payroll. That is why a Roth contribution can reduce take-home pay more than the same traditional contribution, all other inputs being equal. It is not an error by itself.
401(k) Contribution Limits for 2026
The IRS sets separate limits for employee elective deferrals, age-based catch-up contributions and total annual additions to a plan. Do not treat the combined plan limit as the amount every employee can defer from pay.
| 2026 limit | Amount | Who it applies to |
|---|---|---|
| Basic employee elective deferral | $24,500 | Combined traditional and Roth elective deferrals, subject to plan and compensation limits |
| Standard age-50 catch-up | $8,000 | Eligible participants age 50+, except those using the higher age 60–63 limit |
| Higher catch-up for ages 60–63 | $11,250 | Eligible participants age 60, 61, 62 or 63 at year end, if the plan permits |
| Total annual additions | $72,000 | Generally employee, employer and applicable after-tax contributions combined, excluding eligible catch-up contributions |
The standard maximum is therefore $32,500 for an eligible participant using the $8,000 catch-up and $35,750 for an eligible age 60–63 participant using the $11,250 higher catch-up. A plan can impose operational limits.
The $24,500 employee elective-deferral limit generally follows the employee across employers for the year. Separate employers may not know how much was deferred through another plan. Add the YTD traditional and Roth elective deferrals from every employer and contact the plan administrator or a qualified tax professional if the combined amount may be excessive.
Current IRS participant guidance describes a Roth catch-up requirement beginning in 2026 for certain participants whose prior-year wages from the plan sponsor exceeded $150,000. The IRS final regulations generally apply in 2027 and permit reasonable, good-faith implementation before then. Confirm the plan’s 2026 procedure with its administrator rather than assuming every payroll system will display the line identically.
Audit the 401(k) Line in 60 Seconds
Use the current column for this paycheck and the YTD column for accumulated contributions. If the labels are unfamiliar, the separate guide to current and YTD columns explains the relationship.
Match the percentage or dollar amount with the benefit election and effective date.
Find which earnings count under the plan, especially bonuses, commissions or overtime.
Previous YTD plus the current contribution should normally equal the new YTD, allowing for labeled corrections.
Compare payroll deductions with the plan account and statement, allowing for the normal processing cycle.
Example: if the previous pay stub shows $1,800 YTD and the current contribution is $150, the new YTD should normally be $1,950. A refund, correction or catch-up adjustment can change the pattern, but it should have an explanation.
| Record | What it proves | What it does not prove alone |
|---|---|---|
| Pay stub | Payroll recorded a current and YTD deduction | That the contribution has posted to the investment account |
| Plan-account history | A contribution posted to the retirement account | That the pay-stub tax bases and YTD totals are correct |
| Employer-match line | Payroll may be reporting an employer contribution | Vesting status or final plan-account timing |
How 401(k) Pay-Stub Amounts Connect to Form W-2
The final YTD amount helps you review annual reporting, but Form W-2 uses tax-specific wage boxes and Box 12 codes.
| W-2 item | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Box 1 federal wages | Employee deferral generally excluded | Contribution remains included |
| Box 3 Social Security wages | Contribution remains included, subject to the wage base | Contribution remains included |
| Box 5 Medicare wages | Contribution remains included | Contribution remains included |
| Box 12 | Code D | Code AA |
| Box 13 | The retirement-plan checkbox can affect whether a separate traditional IRA contribution is deductible. | |
Use the official W-2 rather than a pay stub when filing a tax return. The stub is useful for checking the figures and asking payroll about a difference. For a full calculation, follow the guide to reconciling pay-stub totals to Form W-2.
What to Do if a 401(k) Amount Is Missing or Wrong
If a deduction appears on the pay stub but does not reach the plan account, start with the employer and plan administrator. The U.S. Department of Labor explains that participant contributions must be forwarded as soon as they can reasonably be separated from the employer’s general assets. For plans with fewer than 100 participants, deposits made by the seventh business day after withholding can qualify for a regulatory safe harbor. That is not a universal waiting period or permission to delay when funds could reasonably be deposited sooner.
If the problem remains unresolved, the Department of Labor’s Employee Benefits Security Administration can explain participant rights and assistance options. Do not assume fraud from one processing delay, but do not ignore repeated unexplained gaps.
“My pay stub dated [date] shows a [traditional/Roth] 401(k) deduction of $[amount], with $[YTD] year to date. Please confirm the election and compensation base used, the date the employee contribution was sent to the plan, the employer-match status, and the expected correction or posting date.”
Authorized business owners and payroll users can create an accurate current pay stub from genuine wage, tax and deduction records. A generator cannot recover or replace an original statement issued by a previous employer. Employees who need a correction should contact payroll or the plan administrator.
Frequently Asked Questions
A traditional 401(k) employee deferral is generally excluded from current federal income-tax wages. It still remains subject to Social Security and Medicare taxes. A Roth 401(k) contribution is made after federal income tax.
No. Gross pay records earnings before deductions. The employee contribution reduces net pay and may reduce certain taxable-wage figures, but it does not erase the earnings from gross pay.
Employee elective deferrals remain included in Social Security and Medicare wages under federal rules, even when a traditional contribution is excluded from federal income-tax wages.
Normally no. An employer match is employer-funded and may appear as an informational contribution. Check the EE/ER label, plan rules and account statement if the line appears to reduce net pay.
The election may not be effective yet, the payroll cutoff may have passed, the plan may exclude certain pay, or payroll may have made an error. Compare the election date with the pay period and contact payroll if the expected deduction is missing.
The basic employee elective-deferral limit is $24,500. An eligible participant age 50 or older may have an $8,000 catch-up; the higher 2026 catch-up is $11,250 for eligible participants ages 60 through 63. Plan and compensation limits still apply.