I tried looking up this up on Google but there were too many irrelevant search results. I also perused through the Roth 401(k) Plan documents but was not able to find a section on this.

My salary is in the 30-40k range. My net income per pay period is less than 50 dollars because I contribute around 3/4's of my income to the Roth 401(k). I was wondering: I can theoretically contribute up to 90% per pay period since this is the limit according to the Plan, what happens if I elect to contribute a percentage that cuts into the income that usually goes to payroll taxes?

Would a company's accounting department even allow this to occur? Would it just be as simple as having a higher tax bill at the end of the year? Or, given that the accounting department does not care or does not catch it, would the IRS come after me for under-withholding?

Thanks a lot!

  • 2
    Anecdotal, but my wife's payroll department simply ignored a salary deferral request which would have caused more to be withheld than she had available. They didn't contact her to reject the request, they just ignored it. So, I think the lesson there is that there is no substitute for contacting your payroll/hr/benefits department and asking.
    – stannius
    Jan 28, 2019 at 21:41
  • Careful if you contributing that high of a % to a Roth 401k/403b or Roth 457. My wife and I max out retirement plans early in the year. It was never an issue with a traditional 401k or 403b. With the Roth versions we had to dial back from 83 % to 65 % HR never notified us as to why. Has happened at three different employers.
    – joe
    Feb 26, 2019 at 0:34

1 Answer 1


I think you'll simply have to ask your HR department how they would handle this. My guess is that withholding would happen first, and the remainder would be eligible to try to meet your percentage, if possible. If it's met, then you get cut a check for the rest, and if not, you simply don't get a paycheck. The reason I believe it would be done this way is because of the exact situation you described- where someone might owe more tax money than they have.

If (and only if) you have another source of income (or a lot of savings) you may have incentive to do as you suggest. One thing you could do is increase your allowances on your W4 to reduce your withholding, leaving more for the 401k. You would make up the difference by decreasing your allowances or adding additional tax on your other jobs' W4s, or making extra quarterly payments on self employment income.

Or, you could max out the traditional 401k instead and avoid the problem completely. I wouldn't recommend this though in your position, particularly if you believe you'll be in a higher tax bracket later in life.

  • I think you are right, going to HR is the solution. It is interesting though that you mention the withholding would happen first. I guess it depends on the relationship between the accounting department and the plan provider. Would it not raise some flags if the plan provider was not able to pull the full percentage of gross income I had elected? I am almost curious enough to try this.
    – coffee guy
    Jan 28, 2019 at 16:56
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    @coffeeguy - I think it's easier to conceptualize if you think of it as a push from your company's bank account to the 401k plan instead of a pull (even if you configure it on the provider side).
    – TTT
    Jan 28, 2019 at 16:58
  • 1
    Thank you for that explanation, it makes a lot of sense. It seems the question in my comment would be a non-issue then, if anything the provider would just probably just email me to let me know of the situation.
    – coffee guy
    Jan 28, 2019 at 17:03
  • Technically you aren't supposed to increase your allowances above what your situation dictates. However, if you do have multiple jobs, as far as I know you can distribute the allowances however you see fit, as well as the extra $ withholding that you probably also have.
    – stannius
    Jan 28, 2019 at 21:35
  • 1
    @stannius - right, which is why i added the "if (and only if)". The most important thing is to get it right. This is exact scenario happens a lot with spouses when both have 401k and one makes a lot more than the other. The lower income spouse artificially inflates the dependents and the other adds additional withholding so they both can max out the 401k (if roth).
    – TTT
    Jan 28, 2019 at 21:40

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