A mega backdoor Roth starts with one question: how much after-tax money can your 401(k) still accept this year? To answer it, you need your plan compensation, your own deferrals, every employer contribution, and the plan’s own after-tax rules.
The estimator below uses the 2026 IRS limits in USD. It shows the room left under the overall limit and whether your plan’s percentage cap is the tighter limit. It cannot tell you whether your plan offers after-tax contributions or Roth conversions, so confirm those features first.
Mega backdoor Roth room estimator (2026 limits)
Estimate how much after-tax 401(k) money one plan year could take under the 2026 overall limit and your plan percentage cap. All money amounts are USD for the same plan year.
Uses the 2026 IRS overall limit of $72,000 or 100% of compensation, whichever is less, and the $360,000 compensation cap for the plan percentage. Catch-up deferrals are left out because they do not use this room. It does not test plan eligibility, nondiscrimination refunds, or conversion taxes.
This tool runs in your browser. Your entries are not sent or saved. All amounts are in US dollars (USD).
Load example fills hypothetical figures. They are not current rates or recommendations.
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What does a mega backdoor Roth actually use?
A 401(k) can have three kinds of employee money: pre-tax deferrals, designated Roth deferrals, and after-tax contributions that are not Roth. The IRS describes after-tax contributions as money you include in income and cannot deduct. The "mega backdoor" label describes moving that after-tax money into a Roth account.
The room for after-tax money comes from the overall limit on annual additions, not from the $24,500 deferral limit. Federal regulations define annual additions as employer contributions, employee contributions, and forfeitures, and they count voluntary employee contributions. After-tax dollars therefore compete with your deferrals and your employer's money for the same space.
How much room does the 2026 limit leave?
For 2026, the IRS sets the elective deferral limit at $24,500 and the defined contribution plan limit at $72,000. The annual additions to your account cannot exceed the lesser of $72,000 or 100% of your compensation. Catch-up contributions do not count against that overall limit.
The basic formula is: overall limit minus your pre-tax and Roth deferrals minus employer contributions equals the remaining room. Your plan can then set a lower cap, often written as a percentage of pay. The smaller of the remaining room and the plan cap is the most the plan could accept.
Hypothetical example: plan compensation is $200,000, deferrals are $24,500, and employer contributions are $10,000. Input: $72,000 overall limit. Formula: $72,000 - $24,500 - $10,000 = $37,500. With a 25% plan cap, the cap is $50,000, so the $37,500 IRS room is the binding limit.
Spread over 24 semimonthly paychecks, $37,500 / 24 = $1,562.50 per paycheck. Check that your payroll system lets you elect a dollar amount or a percentage that lands near this figure. A percentage election may overshoot or undershoot when bonuses change your pay.
When is your plan's cap the real limit?
Some plans cap after-tax contributions as a percentage of pay, so check your plan documents. In the same hypothetical case with a 10% cap, the plan cap is $200,000 x 10% = $20,000. That is less than the $37,500 of IRS room, so $20,000 is the most you could add, or $20,000 / 24 = $833.33 per paycheck after rounding down.
The IRS compensation limit also matters here. For 2026, plans can count at most $360,000 of compensation when calculating contributions. A 10% cap on $500,000 of pay is therefore figured on $360,000, which gives $36,000, not $50,000. The estimator applies that ceiling to the percentage cap.
| Case | Plan pay | Deferrals plus employer | IRS room left | Plan cap | After-tax possible |
|---|---|---|---|---|---|
| A: 25% cap | $200,000 | $34,500 | $37,500 | $50,000 | $37,500 |
| B: 10% cap | $200,000 | $34,500 | $37,500 | $20,000 | $20,000 |
| C: no cap, lower pay | $60,000 | $27,500 | $32,500 | $60,000 | $32,500 |
Case C shows a different limit. With $60,000 of pay, the overall limit is $60,000 because 100% of compensation is lower than $72,000. The IRS room is $60,000 - $24,500 - $3,000 = $32,500. Yet $60,000 - $24,500 - $32,500 leaves only $3,000 of gross pay before taxes and other withholding.
That gap between legal room and cash you can actually spare is the practical constraint for most households. Treat the estimator's figure as a ceiling. Then decide how much your take-home budget can fund after taxes, benefits, rent, and emergency savings.
Do catch-up contributions change the room?
No. The IRS lists the annual additions as elective deferrals, but not catch-up contributions, plus employer contributions and forfeitures. For 2026, the regular catch-up limit is $8,000, and participants age 60 to 63 can have a higher limit of $11,250 if the plan allows it.
So enter only regular deferrals up to $24,500 in the estimator. If you are 52 and defer $32,500, enter $24,500 and leave the $8,000 catch-up out. Including it would understate the after-tax room by $8,000 in this hypothetical case.
Why can a plan refund after-tax contributions?
Traditional 401(k) plans must pass yearly nondiscrimination tests. According to the IRS, the Actual Contribution Percentage test divides each participant's matching and after-tax contributions by compensation, then compares highly compensated employees with everyone else.
The IRS lists $160,000 as the 2026 highly compensated employee threshold. If the plan fails the test, it must take the correction described in the plan document, which can include returning money to highly compensated employees. Ask the plan administrator whether after-tax contributions were refunded in recent years before building a long-term plan around them.
What happens to the earnings before conversion?
After-tax contributions are basis, but their earnings are not. The IRS states that earnings on after-tax contributions are pretax amounts in your account. That is why people try to convert or roll after-tax money quickly, before much growth builds up.
Under Notice 2014-54, a distribution sent to multiple destinations at once can send pretax amounts to a traditional IRA and after-tax amounts to a Roth IRA. The IRS also says a partial distribution generally must include a proportional share of pretax and after-tax amounts. Your plan's distribution and in-plan conversion rules decide which route is open.
Hypothetical example: you contribute $5,000 of after-tax money and it grows by $100 before a move to Roth. The $5,000 is after-tax basis and the $100 is pretax earnings. Converting both into a Roth account generally adds the $100 to taxable income, so confirm the tax reporting with your plan.
When does this strategy not fit?
It does not fit if your plan lacks after-tax contributions, or if it offers neither in-plan Roth conversions nor in-service distributions of after-tax money. In that case, after-tax dollars stay in the plan and their earnings remain pretax amounts that are taxed when distributed. Compare that outcome with your other savings options before contributing.
It also does not fit when the money is needed sooner. High-interest debt, a thin emergency fund, or a near-term goal such as a home purchase can matter more than extra tax-advantaged space. For long-range planning, see the coast FIRE calculator before committing more cash to retirement accounts.
Finally, the estimator covers one employer's plan. If you also have a solo 401(k) or contributions from a related employer, the IRS applies limits across plans in specific ways. Use a tax professional or the plan's administrator rather than adding those numbers yourself.
How the estimator rounds and what it leaves out
Amounts are converted to cents. The overall limit is the lesser of $72,000 and plan compensation. Room equals that limit minus deferrals and employer contributions, floored at zero. The plan cap equals the cap percentage times compensation, with compensation capped at $360,000, rounded down to the cent. The per-paycheck figure divides the result by remaining paychecks and rounds down.
It does not model vesting, forfeitures, true-up matches, mid-year job changes, plan-year differences, nondiscrimination refunds, investment growth, or conversion taxes. It does not check whether your plan permits after-tax contributions.
Quick decision checklist
- Confirm your plan accepts after-tax contributions and offers an in-plan Roth conversion or in-service distribution.
- Add your regular deferrals and every expected employer contribution for the plan year.
- Compare the IRS room with the plan's percentage cap and use the smaller number.
- Check whether take-home pay can fund the per-paycheck amount after other priorities.
- Ask about recent nondiscrimination refunds and how conversion earnings are taxed.
Sources and verification
Official pages checked October 6, 2026. The financial examples are hypothetical calculations by Penny Desktop, not IRS illustrations.
- IRS: COLA increases for dollar limitations on benefits and contributions, for the 2026 $24,500 deferral, $72,000 defined contribution, $8,000 and $11,250 catch-up, $360,000 compensation, and $160,000 HCE figures.
- IRS: 401(k) and profit-sharing plan contribution limits, for the overall annual additions limit, the 100% of compensation rule, and the exclusion of catch-up contributions.
- 26 CFR 1.415(c)-1 (eCFR), for the definition of annual additions, including voluntary employee contributions.
- IRS: Rollovers of after-tax contributions in retirement plans, for Notice 2014-54 allocation, proportional distributions, and the pretax status of earnings.
- IRS: 401(k) Fix-it Guide on ADP and ACP tests, for how after-tax contributions enter the ACP test and how failures are corrected.
Prepared with AI-assisted research, drafting, and calculation checks. Not independently reviewed by a human financial professional.
