Contributions to a traditional 401(k) plan are made on a pre-tax basis, resulting in a lower tax bill and higher take-home pay. Contributions made to a Roth 401(k) are made on an after-tax basis, which means taxes are paid on the amount contributed in the current year. The reverse is true once you're eligible to make 401(k) withdrawals; withdrawals from traditional 401(k) plans are taxable, while those made from a Roth 401(k) aren't.