Solo 401(k) Contribution Calculator

Up to $24,500 as an employee deferral, plus an employer contribution of up to 25% of your W-2 salary (S-corp) or roughly 20% of net self-employment earnings (sole proprietor). The combined employee-plus-employer cap is $72,000 for 2026. If you're 50 or older, you can add an $8,000 catch-up on top of that, and if you're 60 to 63, the catch-up rises to $11,250 under SECURE 2.0. Your total contribution can never exceed your compensation from the business.

At the same income, a solo 401(k) almost always allows more. A SEP IRA only permits the employer piece. 25% of W-2 wages or about 20% of net self-employment earnings, with no employee deferral and no catch-up. A solo 401(k) lets you stack the $24,500 employee deferral on top of the same employer contribution. Example: a sole proprietor with $100K of net profit can put roughly $18,500 into a SEP, but roughly $43,000 into a solo 401(k). The SEP's advantages are simplicity and no annual filing, but the solo 401(k) wins on dollars for most owners under about $350K of income.

Yes, this is one of the most valuable and most misunderstood combinations. The employee deferral limit ($24,500 for 2026) is per person across all plans, so whatever you defer at your day job reduces what you can defer into your solo 401(k). But the overall $72,000 limit applies separately to each unrelated employer. That means even if you max your deferral at work, your solo 401(k) can still receive the full employer contribution from your side business. One trap: if you own both businesses (or they're under common control), the plans may be aggregated, get that reviewed before you contribute.

If your spouse earns income from the same business, as a W-2 employee or as a partner, they can participate in the plan without disqualifying its one-participant status. That effectively doubles the household's capacity: each spouse gets their own $24,500 deferral, their own employer contribution based on their own compensation, and their own catch-up if 50 or older. The compensation has to be real and documented; you can't just add a spouse to the payroll for a contribution they didn't earn.

Yes, if your plan document allows it. The mega backdoor Roth uses after-tax (non-Roth) employee contributions to fill the gap between your regular contributions and the $72,000 overall limit, then converts those dollars to Roth inside the plan. Off-the-shelf solo 401(k) documents usually don't include after-tax contributions or in-plan conversions, so you'd need a customized plan document. Done right, it can move tens of thousands of extra dollars into Roth each year. See our mega backdoor Roth guide for the mechanics.

It's the same 25% rule applied to two different bases. An S-corp owner's compensation is a fixed W-2 salary, so the math is simple: 25% of wages. A sole proprietor's "compensation" is net earnings after subtracting both half of self-employment tax and the contribution itself, the contribution reduces its own base. Working through that circular math, 25% of the reduced base equals about 20% of net profit after the SE-tax deduction. Note the flip side: the S-corp employer contribution is computed only on your W-2 salary, so a low salary shrinks your retirement contribution room.

Employer contributions are forgiving: you can generally establish the plan and fund the employer piece up to your tax-filing deadline, including extensions. Employee deferrals are stricter, the election generally must be in place by December 31, and if you're an S-corp owner, deferrals have to actually run through payroll during the year. Translation: if it's December and you haven't set up the plan, move now; if it's February, you've likely lost the deferral for last year but can still capture the employer contribution.