When an employee has a Roth 401(k) with an employer match, how are the employer's matching funds applied? Multiple choice question. The matching funds must be put in a traditional 401(k) for the employee because employers can NOT make contributions to a Roth 401(k). The employee will lose the matching funds if a Roth 401(k) is chosen because the employer is NOT allowed to invest in that type of account. The employee can elect to pay income tax on the amount of the employer's contribution, so that the matching funds can be applied in the Roth 401(k). The employer is able to invest the matching funds directly into the employees' chosen investments for their Roth 401(k)'s