<prompt> Human: My company just added a Roth 401k option and I am just wondering how their contribution is taxed. My company matches 3 and I want to know if I should therefore contribute 3 or something like 3.5 to maximize the efficiency. If the tax hits my contribution before the company throws in theirs, then the 0.5 or so accounts for what I am being taxed before they contribute. Roth 401ks are new to me, so sorry if that was confusing. Thanks!  <response>: The money they contribute is treated like traditional 401k funds, so theres no tax on it now but youll pay income tax on it when you take a distribution.You pay taxes on the money you contribute to a Roth 401k just as if it were your normal income, it doesnt come out of the money you contribute. 