Who this is for: a sole proprietor (or single-member LLC taxed as one) with a Solo 401(k) and no eligible employees other than a spouse. The employer contribution follows the Deduction Worksheet for Self-Employed in IRS Publication 560. If you're an S corporation owner paid a W-2 salary, the math is different: the employer contribution is 25% of that salary.

Tax Year

Your Age on December 31

Net Profit From Your Business

Schedule C, line 31 (or Schedule F, line 34)

Deferrals Already Made to Another Employer's Plan This Year (optional)

401(k), 403(b) or SIMPLE IRA deferrals from a job, pre-tax and Roth combined. The employee deferral limit is per person across every plan you're in.

W-2 Wages Subject to Social Security (optional)

Only if you also had a job this year. Boxes 3 and 7 of your W-2s. These lower your self-employment tax.

Your Maximum Solo 401(k) Contribution

Your Contribution

Employee deferral (pre-tax or Roth)

Catch-up contribution

Employer (profit-sharing) contribution

Total

Self-Employment Tax (Schedule SE)

Net profit

Net earnings subject to SE tax (profit × 92.35%)

Social Security portion (12.4%, up to )

Medicare portion (2.9%)

Deduction for half of SE tax

How Each Piece Is Figured

Step 1Net earnings from self-employmentNet profit minus half of SE tax

Step 2Employer contribution: step 1 × 20%

Step 3Employee deferral room

Step 4Deferral: smaller of step 3 or what's left of step 1

Step 5Annual additions limit (deferral + employer)Catch-ups don't count toward it

Step 6Catch-up, if eligibleLimited to compensation still left

Deadlines: employee deferrals generally have to be elected by December 31 of the tax year, even though a sole proprietor can deposit them later. The employer contribution can be made up to your tax return due date, including extensions. Once plan assets pass $250,000 at year-end, Form 5500-EZ is due by July 31 (for a calendar-year plan).

Already put in more than this?

An excess in a Solo 401(k) has its own correction rules and deadlines. The Small Business Excess Contribution Fix identifies the correction path, calculates the earnings that must come out with it, and gives you a step-by-step plan.

See the Excess Contribution Fix

Comparing plans? Try the free SEP IRA Contribution Calculator or the Small Business Retirement Plan Selector.

This calculator is for educational and informational purposes only. It is not tax, legal, or financial advice and does not create an advisor-client relationship. Confirm your figures with a tax professional before contributing. It assumes a sole proprietor with no eligible employees other than a spouse and no other plan for the same business, and follows IRS Publication 560.

How Much Can You Put in a Solo 401(k)?

A Solo 401(k) lets you contribute in two roles. As the employee, you can defer up to the annual limit ($24,500 for 2026), plus a catch-up if you're 50 or older. As the employer, you can add a profit-sharing contribution of up to 20% of your net earnings from self-employment. Together, the deferral and employer contribution are capped at the annual additions limit ($72,000 for 2026), and catch-ups sit on top of that.

Why the Employer Share Is 20%, Not 25%

Your net earnings are net profit minus half of your self-employment tax. Because the employer contribution also reduces the number it's calculated from, the IRS converts the 25% plan rate into a reduced rate of 20% for the owner. It's the same math a SEP IRA uses, which is why the employer side of a Solo 401(k) matches the SEP maximum.

A Worked Example: $100,000 of Net Profit

Self-employment tax is $14,129.55, so net earnings are $92,935.22 after deducting half of it. The employer contribution is 20% of that, or $18,587. The employee deferral adds up to $24,500 for 2026, for a total of $43,087 before any catch-up. A SEP IRA on the same profit tops out at $18,587. The employee deferral is the difference, which is why a Solo 401(k) usually wins at lower and middle incomes.

The Limits for 2025 and 2026

Limit	2025	2026
Employee deferral	$23,500	$24,500
Catch-up, age 50 to 59 and 64+	$7,500	$8,000
Catch-up, age 60 to 63	$11,250	$11,250
Annual additions (deferral + employer)	$70,000	$72,000
Compensation that can be counted	$350,000	$360,000

If You Also Have a Job With a 401(k)

The employee deferral limit is per person, so deferrals at your day job use up the same limit. The employer side and the annual additions limit are figured separately for your own business, so a side business can still take a full employer contribution.

SEP IRA or Solo 401(k)?

For most sole proprietors without employees, a Solo 401(k) allows more because of the employee deferral. A SEP is simpler and can be opened after year-end. The full comparison is in Solo 401(k) vs SEP IRA.

Sources: IRS Publication 560, Retirement Plans for Small Business (Deduction Worksheet for Self-Employed); Instructions for Schedule SE (Form 1040); IRS cost-of-living adjustments for 2025 and 2026 plan limits; Instructions for Form 5500-EZ.