Solo 401(k) Calculator

2026

Calculate employee + employer Solo 401(k) contributions. Compare to SEP IRA limits.

By Konstantin Iakovlev · Updated September 2026 · Source: IRS — One-Participant 401(k) Plans

$
Employee Contribution Type

Employee Contribution

$24,500.00

Employer Contribution

$27,880.57

Total Contribution

$52,380.57

Contribution Breakdown

Employee Deferral (traditional)$24,500.00
Employer Profit Sharing (20%)$27,880.57
2026 Total Cap$72,000.00
Your Total Contribution$52,380.57
Effective Savings Rate34.92%

Solo 401(k) vs SEP-IRA

Solo 401(k) Total$52,380.57
SEP-IRA Max$27,880.57
Solo 401(k) Advantage$24,500.00
Estimated Tax Savings$12,571.34

Use the Solo 401(k) Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

For a self-employed person or business owner with no employees, the Solo 401(k) is among the most generous retirement accounts on offer. In 2026 the total contribution can reach $72,000 a year, rising to $80,000 once you turn 50, and mapping out exactly how much you can put away lets you capture the full tax benefit and build savings faster.

Two pieces add together. Employee deferrals come first, capped at 100% of compensation and no more than $24,500 in 2026 ($32,500 from age 50). Employer contributions follow: up to 20% of net self-employment income for sole proprietors (the 25% rate applied to pay after the contribution itself), or 25% of W-2 pay for those operating through a corporation. This calculator handles the sole-proprietor case. Net self-employment income here means business profit reduced by half of self-employment tax, and that reduction shapes the final number.

Basing the employer piece on gross profit instead of net self-employment income is a frequent error, and it can push you into excess contributions and penalties. Total contributions still can't top 100% of your compensation, and holding more than one retirement plan may bring aggregate limits into play. Funding the account by your tax filing deadline, extensions included, gives you the most room to plan.

Freelance Consultant with $85,000 Net Self-Employment Income

  1. 1 Sarah, a 45-year-old freelance marketing consultant, reports $85,000 in net business profit for 2026 and pays $12,010 in self-employment tax ($85,000 × 92.35% × 15.3%).
  2. 2 Calculate net self-employment income: $85,000 - ($12,010 ÷ 2) = $85,000 - $6,005 = $78,995 in compensation for Solo 401(k) purposes.
  3. 3 Employee deferral limit: $24,500 (2026 limit). Employer contribution: $78,995 × 20% = $15,799. Combined potential contribution: $24,500 + $15,799 = $40,299.
  4. 4 Sarah can contribute a maximum of $40,299 to her Solo 401(k) in 2026, providing substantial tax savings while staying well under the $72,000 annual limit. This contribution reduces her taxable income and accelerates her retirement savings significantly.

Source: IRS — One-Participant 401(k) Plans · Last updated: September 2026

Frequently Asked Questions

How much can I contribute to a Solo 401(k) in 2026?
The 2026 Solo 401(k) limit is $24,500 as an employee elective deferral ($32,500 if 50+), plus an employer contribution of up to 20% of net self-employment income after half of the self-employment tax (25% of W-2 pay if you run the business as a corporation). The combined total cannot exceed $72,000 ($80,000 if 50+).
Is a Solo 401(k) better than a SEP IRA?
Often yes. The Solo 401(k) allows higher contributions at lower income levels because of the employee deferral portion. It also allows Roth contributions, loans, and is not subject to the SEP IRA pro-rata issue for backdoor Roth conversions. The only downside is slightly more paperwork.
Can I open a Solo 401(k) if I have employees?
No. A Solo 401(k) is exclusively for business owners with no full-time employees other than a spouse. If you hire employees (other than your spouse), you must use a different plan type like a SEP IRA, SIMPLE IRA, or traditional 401(k).

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