A pre-tax contribution is a salary deferral made before federal income tax is calculated. Taxable income falls by the amount contributed, and the money is taxed as ordinary income when it is withdrawn. The IRS comparison chart describes pre-tax 401(k) contributions as made with before-tax dollars.
The tax saved depends on the marginal tax rate. The contribution counts toward the annual employee deferral limit, $24,500 in 2026.
Formula
tax saved = contribution × marginal rate
take-home cost = contribution − tax saved
Example
A single filer in 2026 has taxable income of $63,900, in the 22% bracket. A $10,000 pre-tax contribution saves $10,000 × 0.22 = $2,200 in federal tax, so it reduces take-home pay by $7,800.
Compare it with the Roth alternative in 401(k) vs Roth 401(k), or estimate the paycheck effect with the paycheck calculator.
Educational only, not tax or investment advice.