Mega Backdoor Roth at Tech Companies

The Mega Backdoor Roth is the single most undervalued financial tool available to tech employees. It lets you contribute an additional ~$30–46K per year to a Roth account on top of the regular $24,500 (2026) employee deferral. Yet most eligible tech workers don't use it, either because they've never heard of it or because their 401(k) portal doesn't explain it well.

How it works

The 2026 IRS § 415(c) annual additions limit is $72,000¹ (employee + employer + after-tax, combined). That number includes:

• Your employee deferral ($24,500 elective in 2026, pre-tax or Roth)
• Your employer's match / profit-sharing
• After-tax employee contributions (not Roth, not pre-tax — a third bucket)

The gap between $72,000 and whatever your employer uses for their match plus your $24,500 elective is your Mega Backdoor Roth contribution space. For typical tech cos:

For higher salaries with bigger employer matches, the remaining MBR space shrinks; for lower salaries with smaller matches, it's larger.

The two-step move

For after-tax contributions to become Roth (and thus grow tax-free), they need to be converted to a Roth account. Two paths:

1. In-plan Roth conversion. Your 401(k) provider converts after-tax dollars to Roth 401(k) within the plan. Instant. Available at companies with this feature enabled.
2. In-service distribution to a Roth IRA. You roll after-tax dollars out of the 401(k) into an outside Roth IRA. Slightly more complex.

Critical detail: you want the conversion to happen quickly and often. If after-tax money sits in the plan earning investment returns before conversion, those earnings are taxable when converted (they're not Roth basis). Best practice: set up automatic monthly conversions so earnings don't accrue.

Which tech companies offer it

Availability changes occasionally; verify with your 401(k) plan administrator. As of recent years, these companies have offered after-tax contributions with in-plan conversion (the Mega Backdoor Roth setup):

• Google / Alphabet — full MBR, well-documented in internal resources
• Meta / Facebook — yes
• Microsoft — yes, auto-convert feature available
• Amazon — yes, but limits vary by segment
• Apple — yes
• Salesforce — yes
• Netflix — yes
• NVIDIA — yes
• Stripe, Airbnb, Uber, Lyft, DoorDash — varies; check your plan

Many mid-size startups do NOT offer it (the plan feature requires explicit setup from the 401(k) provider and doesn't come default).

What this saves you over a career

$35K/yr of Roth growth over 25 years at 7% real return ≈ $2.2M of tax-free retirement assets. That's a meaningful chunk of most tech workers' retirement planning. And it's completely additive to whatever you were already saving.

Common mistakes

• Not knowing you have it. The biggest one. Check your plan today.
• Contributing pre-tax instead of after-tax. The MBR requires after-tax contributions specifically. Pre-tax contributions hit the $24,500 limit and stop.
• Not converting. After-tax dollars in a traditional 401(k) grow but the earnings are taxed at distribution. Convert to Roth as early and often as possible.
• Stacking wrong. If you have multiple employers in one year (common after a job change), you can over-contribute at the employee level but the overall $72K § 415(c) limit is per-employer. Coordinate with tax planning.
• Forgetting it on job change. Roll over the after-tax/Roth 401(k) money to an appropriate Roth IRA when you leave; don't leave it stranded.

Legislative risk

Congress has periodically proposed eliminating the Mega Backdoor Roth (Build Back Better draft in 2021 included this). Nothing has passed yet, but the current availability is not guaranteed forever. Use it while it exists.