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Ballpark TaxEst. 2026 · Free tools

Solo 401(k) contribution calculator

A solo 401(k) lets you contribute twice — once as the employee and again as the employer. At most freelance incomes that shelters far more than a SEP IRA, and this shows you by how much.

Solo 401(k) room this year

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Enter your business profit to see how much you can shelter, and how a solo 401(k) compares with a SEP IRA.

Employee deferral
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Employer share
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SEP IRA would allow
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Solo 401(k) advantage
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Business profit for the yearSchedule C net profit.
Your age50 and over get a catch-up. Ages 60 to 63 get a larger one.
401(k) deferrals already made elsewhereThe deferral limit is per person, not per plan — a day job's 401(k) uses the same allowance.
Your top federal tax bracket
Business profitSchedule C net profit. The 92.35% factor applies to the SE tax only, not to this.—
Less half your self-employment tax—
Contribution base—
Employee deferral—
Employer contribution20% of the contribution base for a sole proprietor.—
Total you can contribute—

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How this is worked out

A solo 401(k) lets you contribute in two roles, and the calculator works out each one.

It starts from your business profit and subtracts half your self-employment tax, the order used in the IRS's worksheet for the self-employed. That figure is your contribution base. On $100,000 of profit, half the self-employment tax is $7,065, so the base is $92,935.

As the employee, you can defer up to $24,500 in 2026, or your whole base if it is smaller. Any 401(k) deferrals you made at another job count towards the same $24,500, so they are subtracted.

As the employer, you can add 20% of the base. The plan limit is 25% of compensation, but for a sole proprietor the contribution itself reduces the compensation it is based on, and solving that circle gives 20%. On $100,000 of profit that is $18,587, for a total of $43,087.

The total cannot exceed $72,000 or your contribution base. Catch-up contributions go on top: $8,000 from age 50, or $11,250 for ages 60 to 63. A SEP IRA allows only the employer part, so at $100,000 of profit it stops at $18,587, which is $24,500 less. The tax saving shown is the total multiplied by your top federal bracket, less the 20% QBI deduction the contributions take away (they reduce your qualified business income too), assuming traditional (pre-tax) contributions.

Sources

Common questions

How much can I contribute to a solo 401(k) in 2026?

Up to $24,500 as an employee deferral plus roughly 20% of your net profit (after deducting half your self-employment tax) as the employer, capped at $72,000 in total. If you are 50 or over you can add a catch-up on top, and ages 60 to 63 get a larger one.

Is a solo 401(k) better than a SEP IRA?

At most freelance income levels, yes — sometimes dramatically. A SEP only allows the employer contribution, so a solo 401(k) shelters up to the full employee deferral more. The gap narrows as profit rises.

Can I contribute if I also have a 401(k) at a day job?

Yes, but the employee deferral limit is per person, not per plan. Money you defer into an employer's 401(k) uses up the same allowance. The employer contribution from your self-employment is separate.

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Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.