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Mandatory Roth Catch-Up Contributions (Secure 2.0 Section 603)

Mandatory Roth Catch-Up Contributions (Secure 2.0 Section 603)

Implement mandatory Roth catch-up contributions for higher earners starting January 1, 2026.

Overview

Beginning January 1st, 2026, “catch-up” contributions to 401k, 403b, and 457 retirement plans will be required to be made as Roth (post-tax) contributions, if the employee earned above $150K in FICA taxable wages in 2025.

This was a requirement introduced by the Secure 2.0 Act (passed in 2022), and the IRS will adjust the limit for inflation every year.

What are “catch-up” contributions?

By default, employees are limited in the amount of contributions they can make to retirement plans, including 401k, 403b, and 457 plans (and each of their respective Roth variants). This limit is set by the IRS and adjusted for inflation every year. Refer to our Defining Benefits guide for the latest limits.

Employees who are above the age of 50 are eligible for “catch-up” contributions, which are a higher limit above the standard limit that applies to all employees. In 2025, this was an additional $7,500 limit, on top of the $23,500 contribution limit for all employees.

In addition, employees who attain the age of 60-63 during the tax year are eligible for an even higher “super catch-up” limit, which in 2025 was $11,250.

What does it mean that “catch-up” contributions are required to be made as Roth contributions?

Contributions to 401k plans can be either traditional or Roth contributions. Traditional contributions are “pre-tax” for tax calculation purposes; in other words, the employee does not need to pay federal or state income tax on those contributions until they are disbursed from their 401k account. Roth contributions are “post-tax”, meaning that the employee pays income tax on the contributions upfront, and does not need to pay tax again on disbursement.

An employee can typically choose whether to make traditional or Roth contributions (or both) to their 401k plan. However, from 1/1/2026 onward, any contributions that are part of the “catch-up” contribution limit (contributions above the standard deferral limit for 401k, 403b, and 457 plans) will be required to be treated as Roth contributions, if the employee made above $145K in FICA wages in 2025.

What if an employee starts with an employer mid-year?

Employers are not required to include an employee’s wages from their previous employer in the calculation of the wage limit. Only wages earned by the employee from the employer who is sponsoring the retirement plan is required to be included in the calculation.

Additionally, employers are not required to prorate an employee’s wages to a full year, if the employee was hired in the middle of the year. Only “actual” wages earned are included in the calculation for the limit.

Mandatory Roth “Catch-Up” Contributions in Check API

Beginning in 2026, there are two different places where partners integrating with Check will encounter this mandatory Roth “catch-up” requirement.

  • Company-defined attributes: All employees who are eligible for catch-up contributions will have a company-defined attribute that asks whether the employee exceeded the wage limit in the previous tax year to be subject to the mandatory Roth “catch-up” requirement.
  • Benefit calculations on payroll preview: Benefit contribution calculations for 401k, 403b, and 457 benefits will distinguish whether the contributions were automatically “roth-ified” as a result of this requirement.
  • Paystubs and payroll reporting: Contributions that were automatically “roth-ified” will be indicated on paystubs and the payroll summary and journal.

More information on the behavior for each of these can be found below.

Company-Defined Attributes

Company-defined attributes (CDAs) are employee-level setup parameters that are provided by the company, about a specific employee.

Beginning in 2026, employers will be prompted for a new CDA for certain employees that asks, “Is this employee subject to mandatory Roth ‘catch-up’ contributions?”. Several unique properties of this CDA are:

  • This CDA will have a default value of “false”, and will not be required (i.e., it will not affect an employee’s Onboard status).
  • This CDA will only be prompted for employees who attain the age of 50 or above in the following tax year (employees who are eligible for “catch-up” contributions).
  • At the end of every year, Check’s system will automatically calculate and save a new effective dated settings for this CDA for the following year, based on whether the employee exceeded the wage threshold in the previous year, if the company start date is in previous year or earlier.
  • If the company start date is in the current year, then Check’s system will not automatically calculate a value for this CDA, and the employer will be required to provide it if an employee needs to be opted in.

The purpose of this CDA is to give employers the option to opt in to Roth “catch-up” contributions for employees who exceeded the threshold in the previous year, but potentially do not have that previous year’s pay history on Check (e.g., they are a switcher company who started on Check mid-year).

After a company’s first year of running payroll on Check, Check’s system will automatically calculate a setting for this CDA going forward, and employers will not need to update it annually.

Benefit Calculations on Payroll Preview

When previewing and approving payroll, it is now possible for a Roth contribution to be calculated automatically for 401k, 403b, and 457 employee benefits, when the mandatory Roth “catch-up” contribution is automatically applied.

This will be indicated by the benefit field on the benefit calculation, which will return the Roth variant of the benefit type (roth_401k, roth_403b, or roth_457) if the calculation represents contributions that were automatically converted to Roth.

For example, on a payroll where $500 out of $1,500 of an employee’s 401k contributions are “catch-up” contributions, and the employee is subject to mandatory Roth “catch-up”, the benefit calculation response on that Payroll Item will be:

// PayrollItem
{
  ...
  "benefits": [
    {
      "benefit": "401k",
      "id": "ben_sPTonDLUjJ5w9rejDLIn", // A 401k employee benefit
      "description": null,
      "employee_contribution_amount": "1000.00",
      "company_contribution_amount": "0.00"
    },
    {
      "benefit": "roth_401k",
      "id": "ben_sPTonDLUjJ5w9rejDLIn", // The same 401k employee benefit
      "description": null,
      "employee_contribution_amount": "500.00",
      "company_contribution_amount": "0.00"
    }
  ]
  ...
}

In addition, a warning will be returned in the warnings array on payroll items that indicates that this automatic Roth occurred occurred. For example:

{
  ...
  "warnings": [
      {
          "code": "partially_applied",
          "reason": "mandatory_roth_catch_up",
          "deduction_type": "benefit",
          "deduction": "ben_sPTonDLUjJ5w9rejDLIn",
          "actual_deduction_amount": "1000.00",
          "expected_deduction_amount": "1500.00"
      }
  ],
  ...
}

Paystubs and Payroll Reporting

  • On employee paystub PDFs, any catch-up contributions for 401k, 403b, or 457 benefits that were automatically “roth-ified” will be indicated in the “Contribution type” column with the value “Employee (Roth Catch Up”).
  • In the JSON representation of employee paystubs, a new field has been added to employee_benefit_contributions called is_roth_catch_up, which indicates whether the contributions were automatically “roth-ified” catch up contributions.

See below for an example:

Notion image
 

For the payroll summary and payroll journal:

  • Additional columns will be added to the CSV report for each 401k, 403b, or 457 benefit if some portion of contributions were automatically “roth-ified”. That column will have the structure [Benefit Description] (EE) (Roth Catch Up)
 
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