Employees contribute to their traditional TSP through automatic payroll deductions and, depending upon the agency they work for, the agency makes contributions to the Plan on their behalf. In addition, new federal employees may also roll over 401(k) contributions and IRA contributions to the TSP. Rollovers also work in the opposite direction if the employees leave federal employment to work in the private sector.
A second type of TSP is known as a Roth TSP.  A Roth TSP allows federal employees to make after-tax contributions. When they retire, participants in the Roth TSP pay no taxes upon distribution as long as the distribution is a qualified distribution.