After Tax (Mega Roth)

Our firm has a lot of owner only so we tend to have alot of mega Roth conversions.  I can't seem to find a definitive answer on what the limit is when the plan is ONLY doing after tax -> Roth.  I've read alot of places that if you are 50 and over, then the limit is $77,500 for 2025 but the examples always include deferrals/Roth.  What about when it's solely after tax?  I read an AI response that said if it's only after tax, then the limit is just $70,000 because after tax is not subject to 402(g):  

• Elective deferrals = pre-tax 401(k) deferrals + Roth 401(k) deferrals (salary-reduction contributions subject to the 402(g) limit).

• After-tax (non-Roth) contributions = a different bucket under §415(c), not subject to 402(g), and not elective deferrals.

Thanks!

After-tax are subject to the overall 415(c) limit.  In order to exceed that, you would need to use catch-up deferrals (which are not subject to 415(c)).

Out of curiosity, from a plan design standpoint, if these are owner-only plans with no discrimination concerns, what is the benefit of making these as after-tax contributions in the first place?  Why not just max out everything (with deferrals and employer discretionary contributions) on a pretax basis and then do a Roth conversion each year?  Or use the new SECURE 2.0 rules to have them contributed on a Roth basis in the first place?

The owners might not have very high compensation. If person's earned income for plan purposes is $85,000 it will be hard to get a maximum contribution with just deferrals and employer. If the owners have personal taxable investment accounts with large balances, its a way to basically transfer $70,000 from that account into a Roth account each year. 

And then instead of sitting in a personal taxable investment account, the money sits in the plan as roth and grows tax free. 

I'm not a big fan personally, but that's what I hear from some that use it for that purpose. 

You also need to check how the plan document defines After Tax Contributions. Many I have seen say that After Tax Contributions are made from Gross Wages paid to the employee during that tax year and withheld from pay, not submitted from other funds the participant may have access to.