How this calculator works
The annual additions limit under IRC §415(c) caps everything added to one employer’s defined contribution plans for the year: the participant’s base deferrals, employer contributions and after-tax contributions. For 2026 it is $72,000 or 100% of compensation, whichever is lower. After-tax room is that limit less the deferrals counted against it and less employer money, never below zero, and no more than any cap the plan sets.
Only deferrals up to the $24,500 elective deferral limit count. Catch-up contributions — $8,000 at 50 or older, $11,250 at ages 60 to 63 — are excluded from annual additions, so they sit on top of the limit and do not use up after-tax room.
Earnings between the after-tax contribution and its conversion are pre-tax money and are taxed as ordinary income when converted. The comparison then follows the same after-tax dollars to withdrawal three ways: converted to Roth (tax-free), left after-tax in the plan (the contributions come back tax-free and the earnings are taxed as ordinary income), and invested in a taxable account (dividends taxed each year, gains taxed at sale).
Worked example
With the defaults — age 45, $200,000 of compensation, $24,500 of deferrals and $12,000 from the employer — the limit is $72,000, and the after-tax room is $35,500. The plan receives $72,000 in total; at 55 with the same contributions plus the $8,000 catch-up, the room is still $35,500 and the total is $80,000.
Converted immediately and grown at 7% for 20 years, the $35,500 is worth $137,374 tax-free. Left unconverted and withdrawn at a 24% rate, it is worth $112,924 after tax; in a taxable account with a 1.5% dividend yield and a 15% capital gains rate, $119,995. The Roth is ahead by $17,379 and $24,450. Leaving the money unconverted matches the taxable account only at a retirement rate of 17.06%.
How to read the result
The headline is the after-tax contribution space this plan year, assuming the plan accepts after-tax contributions; the breakdown shows which part of the limit is already used. A zero means deferrals and employer money have filled the limit. Any notes under the headline flag deferrals over the limit, a binding plan cap, or compensation below the dollar limit.
The breakeven rate compares the two ways of holding the money without converting it. At a retirement rate below it, leaving the after-tax money in the plan comes out ahead of a taxable account, because tax-deferred growth outweighs paying ordinary rates on the earnings later; above it, the taxable account is ahead. Prompt conversion avoids the question, since the only tax is on the small amount earned before conversion. The rate rises with a longer horizon and a higher dividend yield.
Assumptions and sources
- IRS, COLA increases for dollar limitations on benefits and contributions — 2026 §415(c), §402(g) and catch-up limits
- IRS, IR-2025-111: 2026 retirement plan limits — announcement of Notice 2025-67
- IRS, Rollovers of after-tax contributions in retirement plans — Notice 2014-54: after-tax amounts to a Roth IRA, pre-tax earnings to a traditional IRA
Limits as of October 2026, for tax year 2026. Returns, tax rates and dividend yield are inputs, not forecasts. Not modelled: whether the plan permits after-tax contributions or in-service conversion; ACP nondiscrimination testing, which can return after-tax contributions to highly compensated employees; contributions to plans of other employers; state tax; and the mandatory Roth treatment of catch-up contributions for employees whose prior-year FICA wages exceed the annual threshold, which changes the catch-up’s tax treatment but not the after-tax room.
Common mistakes
- Subtracting catch-up contributions from the limit. Catch-up deferrals are excluded from annual additions, so they do not reduce after-tax room.
- Leaving out employer money. Match, profit sharing, forfeitures and true-up contributions made after year end all count toward the same limit.
- Using the dollar limit when pay is lower. The limit is the lesser of the dollar figure and 100% of compensation.
- Treating the deferral limit as per plan. The elective deferral limit is per person across every employer’s plan, while the annual additions limit applies per unrelated employer.
- Leaving after-tax money unconverted for years. Its earnings are pre-tax and are taxed as ordinary income when withdrawn or converted later.
Frequently Asked Questions
How much can go into a mega backdoor Roth in 2026?
Up to $72,000, or 100% of compensation if lower, less base deferrals and employer contributions. With full deferrals of $24,500 and no employer money, that leaves $47,500 of after-tax room; the plan must allow after-tax contributions.
Do catch-up contributions reduce mega backdoor room?
No. Catch-up deferrals ($8,000 at 50 or older, $11,250 at 60 to 63) are excluded from the annual additions limit, so the total going into the plan can exceed $72,000.
Does the employer match count toward the limit?
Yes. Matching contributions, profit sharing and allocated forfeitures are annual additions, so every dollar from the employer reduces after-tax room by a dollar.
What is taxed when after-tax contributions are converted?
Only the earnings since the contribution, which are taxed as ordinary income. The after-tax contributions themselves have already been taxed; automatic in-plan conversion keeps the earnings, and the tax, close to zero.
What happens if the plan fails the ACP test?
After-tax contributions are tested with matching contributions under IRC §401(m). If the plan fails, highly compensated employees can have some of their after-tax contributions returned, which reduces what reaches the Roth.