Your after-tax 401(k) contribution was already taxed once, so converting it to Roth triggers no additional tax on the contribution itself. The investment growth that happens between contributing and converting is different: it is taxed as ordinary income the year you convert. Cadence is entirely about how much growth accumulates before that happens.
| Path | Growth exposed to tax | Who controls it after |
|---|---|---|
| Automatic / same-day in-plan conversion | Close to zero — typically a day or two of growth per contribution | Stays in the 401(k) as a Roth 401(k) source, your plan's investment menu |
| Periodic in-plan conversion (quarterly/annual) | Whatever the after-tax balance earned since the last conversion | Stays in the 401(k) as a Roth 401(k) source |
| In-service withdrawal to a Roth IRA | Whatever the after-tax balance earned before the withdrawal, same as periodic conversion if not done immediately | Moves to a Roth IRA you control directly, with its own investment options |
Your after-tax 401(k) contribution was already taxed once when you earned it, so converting the contribution itself to Roth triggers no additional tax. Any investment growth on that money between the contribution and the conversion is a different story: it is taxed as ordinary income in the year you convert. The longer the gap between contributing and converting, the more growth accumulates, and the larger that tax bill gets.
Some plan providers convert each after-tax contribution to Roth automatically, often within the plan's own processing window (commonly next business day). With growth measured in a day or two rather than a quarter or a year, the taxable amount is close to zero on every conversion. This is the cleanest version of the strategy and the one most write-ups assume, but it requires your specific plan and recordkeeper to actually support it -- many do not.
If you convert quarterly, annually, or only when you remember to, the after-tax bucket sits invested for that whole period first. Whatever it earns in that time is ordinary taxable income at conversion -- not capital-gains-rate income, and not tax-free. A saver contributing early in the year and converting only at year-end effectively volunteers for a year of market growth to be taxed at their marginal rate instead of eventually being Roth-tax-free growth.
Both move after-tax 401(k) money (and its growth) into Roth treatment, and both tax the growth portion the same way. The practical difference is destination and control: an in-plan conversion stays inside the 401(k) as a separate Roth 401(k) source, subject to the plan's own investment menu and rules; an in-service withdrawal moves the money out to a Roth IRA you control directly, with the IRA's own investment options and withdrawal rules (including the five-year rule on converted amounts). Not every plan allows either one -- some allow after-tax contributions but neither conversion path, which removes most of the strategy's benefit.
Your plan's summary plan description (SPD) is the authoritative source, or a direct question to your plan administrator or HR/benefits contact: does the plan allow after-tax (non-Roth) employee contributions above the elective-deferral limit, and does it offer in-plan Roth conversion or in-service withdrawals, and if so how often. This calculator cannot know your plan's specific rules -- it only computes the dollar headroom once you know whether the strategy is available to you at all.
This page names no specific plan provider or product -- it compares the generic conversion mechanisms available across 401(k) plans in general, not a competing tool.