Beginning in 2026, certain higher-earning participants must make all of their catch-up contributions on a Roth (after-tax) basis. This rule was created under the SECURE Act 2.0 and later clarified by IRS Notice 2023-62 and final regulations issued in 2025.

What the Law Requires

Beginning January 1, 2026, catch-up contributions must be made as Roth contributions for any participant who meets both of the following:

  1. Is age 50 or older during the calendar year, and
  2. Earned more than $145,000 (indexed) in FICA wages from the plan-sponsoring employer in the prior calendar year.

These individuals are referred to as Highly Paid Individuals (HPIs) or Highly Paid Participants (HPPs) under the final regulations.

Key Points

  • The $145,000 threshold is based on Form W-2, Box 3 (Social Security wages) from the employer only.
  • The requirement applies to all age-based catch-up contributions, including the expanded “super catch-up” available at ages 60–63.
  • If any participant is required to make Roth catch-ups, the plan must also permit Roth catch-up contributions for all eligible participants.

Who Is Impacted?

Participants who are subject to the Roth catch-up requirement:

  • Age 50 or older
  • Have more than $145,000 in prior-year Social Security wages (W-2 Box 3) from the employer sponsoring the plan

Participants who are not subject:

  • Individuals under age 50 (not eligible for catch-ups)
  • Individuals with $145,000 or less in FICA wages from the employer in the prior year
  • Self-employed owners, partners, or others without FICA wages (e.g., Schedule C or K-1 compensation)
  • Certain categories of governmental or public employees whose wages are not reported for Social Security

What Plans Must Do

To comply with this legislation, plans must ensure that:

  1. Roth contributions are available under the plan for catch-up purposes.
    • If the plan does not currently allow Roth, it must either add Roth or eliminate catch-up contributions.
  2. Payroll systems correctly identify eligible individuals.
    • Only the employer/payroll provider can determine who earned >$145,000 in the prior year.
    • Catch-up contributions for these individuals must be withheld as Roth, not pre-tax.
  3. Catch-up contributions are tracked separately from standard deferrals.

Additional Resources by Audience

These articles provide more tailored information depending on your role:

  • For Participants: Understanding Roth Catch-Up Contributions (2026)
  • For Employers / Plan Sponsors/Plan Administrators: Preparing Your Payroll for the 2026 Roth Catch-Up Requirement
  • For Single(k) Sponsors: Roth Catch-Up Rules for Single(k) Plan Sponsors: When the 2026 Requirement Applies