Solo 401(k) Calculator
Find your maximum Solo 401(k) contribution, combining the employee salary deferral with the employer profit-sharing share.
Want to understand the concept, not just the number? Read The Self-Employed Retirement Guide .
How it's calculated
A Solo 401(k) is the most generous retirement account for a self-employed person with no employees, because you wear two hats. As the employee you can defer up to the annual salary-deferral limit, and as the employer you can add a profit-sharing contribution on top. Together they let a solo business owner sock away far more than an IRA allows.
Start with the employer side. It is 20 percent of your net self-employment income, which is your net profit minus the deductible half of your self-employment tax. Take the default. A $100,000 net profit owes about $14,130 of self-employment tax, half of which is $7,065, so your net self-employment income is $92,935.22. Twenty percent of that is $18,587.04, the employer profit-sharing contribution. Then, as the employee, you can defer the full $24,500 salary-deferral limit for 2026, since your income easily covers it. Add the two and you can put away $43,087.04 for the year.
Both pieces together are capped at the overall section 415(c) limit, which is $72,000 for 2026, and savers age 50 and older can add a catch-up deferral above that. The default lands well under the cap, so the full deferral plus 20 percent employer share both count. A higher profit pushes the employer share up until the combined total hits the ceiling. Because the employee deferral is a flat dollar amount, a Solo 401(k) lets lower earners save a much bigger share of their income than a SEP-IRA does, which is its key edge.
Assumptions
- A Solo 401(k) lets you contribute as both employee and employer. The employee deferral is up to the annual limit, and the employer share is 20 percent of your net self-employment income.
- Net self-employment income is net profit minus the deductible half of self-employment tax. The total is capped at the section 415(c) limit for the year, plus any age-50 catch-up. 2026 limits come from the versioned tax data.
Last updated: 2026-08-08 · Tax year 2026
These assumptions follow our general methodology.
Frequently asked questions
How much can I contribute to a Solo 401(k)?
As the employee you can defer up to the annual limit, $24,500 for 2026, and as the employer you can add 20 percent of your net self-employment income. The combined total is capped at $72,000 for 2026, with an extra catch-up allowed at age 50 and older.
Why is the employer share 20 percent and not 25 percent?
The 25 percent figure is of W-2 compensation. For a sole proprietor there is no W-2 wage, so the math works out to 20 percent of net self-employment income, which is your net profit minus the deductible half of self-employment tax. The two approaches give the same dollar result.
Is a Solo 401(k) better than a SEP-IRA?
Usually, especially at lower and middle incomes, because the Solo 401(k) adds the flat employee deferral on top of the same 20 percent employer share. A SEP-IRA only offers the 20 percent piece. Compare the two here and with the SEP-IRA calculator to see the gap at your income.
Can I still contribute if I have a day job with a 401(k)?
Often yes. The employee deferral limit is shared across all your 401(k) plans, so if you max it at work you cannot defer again in the solo plan. But you can still make the employer profit-sharing contribution from your self-employment income, up to the overall limit.