Solo 401(k) Contribution Calculator (Employee Deferral + Employer Profit-Sharing)

A Solo 401(k), sometimes called a one-participant 401(k) or an individual 401(k), is a 401(k) plan built for a business with exactly one owner and no full-time employees other than a spouse. Because you are simultaneously the "employer" and the "employee" of your own business, you get to make two separate contributions to the same account: an employee elective deferral, capped at a fixed dollar amount regardless of income, and an employer profit-sharing contribution, sized as a percentage of what the business earned.

That combination is what makes the Solo 401(k) the highest-ceiling retirement account available to most self-employed people. A SEP-IRA gets you the employer side only. A SIMPLE IRA caps the employee side much lower. The Solo 401(k) stacks both, up to the same overall combined limit that applies to any 401(k) plan, currently $72,000 for 2026 before catch-up contributions, or as much as $83,250 for someone eligible for the SECURE 2.0 age 60-63 super catch-up.

The tradeoff is administrative. Solo 401(k)s require more paperwork than a SEP-IRA (a one-time plan adoption document, and an annual Form 5500-EZ filing once the account passes $250,000), and the plan stops working the moment the business hires a non-spouse employee who meets standard eligibility requirements. For a genuinely solo operation, though, it is usually the most powerful option on the table.

The math runs in three stages, and the middle stage is where most online calculators get it wrong.

First, net earnings from self-employment. Your employer profit-sharing contribution is not calculated off raw Schedule C profit. IRC Sec. 401(c)(2) requires you to first subtract the deductible one-half of your self-employment tax, the same self-employment tax computed on Schedule SE (12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare, applied to 92.35% of net profit). What's left is "net earnings from self-employment," the self-employed equivalent of a W-2 employee's compensation.

Second, the employer profit-share reduced rate. A Solo 401(k)'s maximum stated employer contribution rate is 25% of compensation. But you cannot apply 25% directly to net earnings from self-employment, because the contribution itself would need to be subtracted from that same number first, a circular calculation. IRS Publication 560 resolves this with a "reduced rate": divide the stated rate by (1 plus the stated rate). For 25%, that reduced rate is 25% / 125%, which comes out to exactly 20%. So the employer profit-share contribution is 20% of net earnings from self-employment, not 25% of raw business profit, and not 25% of net earnings either. Skipping this adjustment, or applying 25% to the wrong base, is the single most common error people make sizing their own Solo 401(k) contribution.

Third, the employee deferral and the combined cap. The employee elective deferral for 2026 is $24,500, plus a $8,000 catch-up at age 50 or older, or a $11,250 SECURE 2.0 "super catch-up" for anyone who turns 60, 61, 62, or 63 during the year (this replaces, rather than stacks with, the standard catch-up). The employee deferral and employer profit-share are then added together, and the non-catch-up portion of that total is capped at $72,000 for 2026 under IRC Sec. 415(c). Catch-up contributions sit outside that combined cap, added on top. Finally, nothing you contribute, in total, can exceed your actual net earnings from self-employment; you cannot contribute more than you earned.

Take a 45-year-old sole proprietor (too young for any catch-up) with $100,000 in net self-employment income, requesting the maximum employee deferral.

Net earnings from self-employment. Self-employment tax on $100,000 of net profit comes to $14,129.55 (92.35% of profit taxed at 15.3% combined Social Security and Medicare). Half of that, $7,064.78, is deductible, leaving net earnings from self-employment of $100,000 minus $7,064.78, or $92,935.22.

Employer profit share. 20% of $92,935.22 is $18,587.04.

Employee deferral. At age 45, the statutory limit is $24,500 with no catch-up available, and that's well under the $92,935.22 in net earnings, so the full $24,500 is allowed.

Combined total. $24,500 plus $18,587.04 comes to $43,087.04 for the year, comfortably under the $72,000 combined 415(c) cap.

Contributing that $43,087.04 every year, growing at an assumed 7% annual return starting from an empty account, the balance after two years reaches $89,190.17, made up of $86,174.08 in contributions and $3,016.09 in investment growth.

The mechanics of investing inside a Solo 401(k), fund selection, tax-deferred (or Roth) growth, required minimum distributions, are identical to a traditional employer-sponsored 401(k). What changes is who's writing the checks. At a regular job, your employer's match is free money layered on top of your own deferral, sized by a formula your employer chose. In a Solo 401(k), you are both parties, and the "employer" contribution is real money the business would otherwise keep, not a bonus, so it competes directly with reinvesting in the business, paying down debt, or building a cash reserve.

• Applying 25% straight to Schedule C profit. This overstates the allowed contribution because it skips both the self-employment tax adjustment and the reduced-rate conversion; the correct multiplier on net earnings from self-employment is 20%, not 25%.
• Forgetting the deferral deadline is earlier than the profit-share deadline. The employee elective deferral election generally must be made by December 31 of the plan year, while the employer profit-sharing contribution can be made up until the business's tax filing deadline, including extensions.
• Not opening the plan before year-end. Unlike a SEP-IRA, which can be opened as late as the tax filing deadline, a Solo 401(k) plan document generally must be adopted by December 31 of the year you want to make an employee deferral for (the SECURE 2.0 Act now allows a new plan to be adopted up until the filing deadline solely for the employer contribution, but not for that year's employee deferral).
• Missing the $250,000 Form 5500-EZ filing threshold. Once total plan assets cross $250,000, an annual Form 5500-EZ filing becomes required; many solo filers are surprised by this once their account grows.
• Assuming the spouse exception means any employee is fine. The "no employees" requirement for a Solo 401(k) allows a spouse who works in the business, but hiring any other employee who works 1,000+ hours a year generally ends the plan's Solo 401(k) status going forward.

• Roth vs. traditional election. This calculator projects pre-tax growth; if your plan offers a Roth employee-deferral option, the tax treatment of the deferral portion differs (contributed after-tax, grows tax-free) even though the dollar limits are identical.
• Multiple businesses or W-2 income. If you have W-2 wages from another job with its own 401(k), the $24,500 employee deferral limit is shared across all plans combined, not per plan; this calculator assumes the Solo 401(k) is your only elective-deferral opportunity.
• Plan fees and investment costs. Custodian fees, fund expense ratios, and any plan administration costs are not modeled.
• Mid-year changes in net profit. The calculation assumes a stable net profit figure repeated each year of the projection; a real business's income typically varies year to year.

• Internal Revenue Service, "401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500," irs.gov/newsroom, IRS Notice 2025-67.
• Internal Revenue Service, COLA Increases for Dollar Limitations on Benefits and Contributions (IRC Sec. 415(c) overall limit, 2026).
• Internal Revenue Service, Publication 560, "Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)," Chapter 5, "Table and Worksheets for the Self-Employed."
• Internal Revenue Service, "Self-employed individuals: Calculating your own retirement plan contribution and deduction," irs.gov.
• Social Security Administration, 2026 Social Security Wage Base (engine/tables/2026/fica.json).