Solo 401(k) Calculator
Your business income, your age and the statutory limits
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Long-range scenario, not a guarantee. Small changes in returns, inflation, fees, taxes, and withdrawal timing can materially change the result.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your net profit from Schedule C — the same line 31 figure a SEP runs on, before any retirement contribution and before the self-employment tax deduction.
- 02
If you pay yourself a W-2 wage from an S corporation instead, leave the profit line at zero and enter this year's wage on the next one. The two routes are measured differently and the page runs whichever you filled.
- 03
Enter your age this year, then your marginal federal rate. Age is not a formality here: under 50 there is no catch-up, 50 to 59 takes $8,000, 60 to 63 takes $11,250 instead of it rather than on top of it, and 64 puts you back on $8,000.
- 04
Check the statutory block: the $24,500 employee deferral limit, the two catch-up figures, the 25% employer profit-share rate, the $72,000 annual additions ceiling and the $360,000 compensation limit. Advanced options holds the $150,000 prior-year FICA wage threshold behind the Roth catch-up rule, plus the self-employment tax pieces.
- 05
Read the headline against the SEP figure beside it, then the table: what each plan allows at ten profit levels, with your own profit dropped in as its own row so the headline and the ladder are the same calculation.
Formula
Plan compensation = net profit − half your self-employment tax, measured exactly as a SEP measures it. Employer share = plan compensation × the reduced rate — 25% ÷ 1.25 = 20% — capped at 25% of the $360,000 compensation limit. Employee deferral = the lesser of $24,500 and the room left under the annual additions ceiling. Annual additions are the deferral plus the employer share and cannot exceed $72,000, or plan compensation itself if that is smaller; the deferral is filled first and the employer share takes what is left. The catch-up your age allows — $8,000 from 50, $11,250 in place of it from 60 to 63, $8,000 again from 64 — sits outside the $72,000 rather than inside it, so your personal ceiling is $72,000 plus that figure. A SEP on the same income is the employer share alone, capped at $72,000, which is why the difference between the two plans is the deferral until the employer share fills the ceiling on its own. On a W-2 wage there is no reduced rate: the employer share is a flat 25% of the wage.
Example
Enter $120,000 of Schedule C profit, leave the S corporation line at zero, and a 24% marginal rate. Half the self-employment tax — $8,478 — comes off first, so plan compensation is $111,522 and the employer share is 20.0% of it: $22,304, which is what a SEP allows on the same profit to the dollar. The $24,500 deferral then stacks on top, because there is room under the $72,000 ceiling, and the total is $46,804 — 39.0% of the profit you typed rather than 18.6%. The deduction is worth $11,233 at 24% and $25,196 of ceiling is still unused. The advantage over a SEP stays flat at the whole $24,500 up to about $252,318 of profit: at $250,000 the solo plan allows $71,543 against a SEP's $47,043. Then it narrows, and at about $376,480 it closes — at $400,000 both reach $72,000. Now put 52 in the age field: the $8,000 catch-up sits outside the ceiling, so $120,000 of profit supports $54,804 against a personal ceiling of $80,000, and because a SEP has no version of a catch-up the advantage never falls below $8,000 — at $400,000 of profit it is $80,000 against $72,000.
Definitions
- Elective deferral
- The employee half of the plan: $24,500 for 2026, one limit per person across every 401(k) and 403(b) you are in, however many businesses you run. Not a percentage of anything, which is why it does not shrink in a bad year.
- Annual additions
- Deferral plus employer share, capped at $72,000 under IRC 415(c) or at plan compensation if that is lower. The age-band catch-up is outside it, so a personal ceiling can exceed $72,000.
- One-participant plan
- A 401(k) covering only an owner and a working spouse. It escapes nondiscrimination testing entirely and files nothing until plan assets pass $250,000, at which point Form 5500-EZ is due annually.
Good to know
One person wearing two hats
A solo 401(k) is not a different kind of plan from the one your last employer ran. It is the same 401(k), with the peculiarity that you are simultaneously the employee making a deferral and the employer making a profit-sharing contribution, and the plan does not care that both are the same person. That structure is the whole reason the plan exists as a category, because the two contributions are governed by completely different rules. The employer half is a percentage: plan compensation — net profit less half your self-employment tax — times the reduced rate of 20% where the plan document says 25%, capped at 25% of the $360,000 compensation limit. That arithmetic is identical to a SEP's, line for line, and this page runs the same helper for both, which is why the SEP column beside the headline agrees with the SEP page to the dollar. The employee half is not a percentage of anything. It is a flat $24,500 for 2026, one limit per person across every 401(k) and 403(b) you are in however many businesses you run, and it does not shrink when the business has a thin year. On $120,000 of Schedule C profit the employer share is $22,304 and the deferral is the full $24,500, so the total is $46,804 — more than twice what the percentage alone allows, and 39.0% of the profit you typed rather than 18.6%. Two ceilings sit over the pair. Annual additions, meaning the deferral plus the employer share, cannot exceed $72,000, and they cannot exceed plan compensation itself, which is the binding one at very low profit. The catch-up your age allows sits OUTSIDE that $72,000 rather than inside it: $8,000 from 50, $11,250 in place of it — not on top of it — for the four years from 60 to 63, back to $8,000 at 64. So a 52-year-old's genuine ceiling for the year is $80,000 and a 61-year-old's is $83,250. The page fills the deferral first and gives the employer share whatever room is left, which is how nearly every plan is funded in practice, because the deferral is the piece a bad year cannot take away.
Where the gap over a SEP opens, and where it closes
The advantage a solo 401(k) has over a SEP is not a constant and it is not a percentage — it has three distinct phases, and knowing which one you are in tells you whether the extra paperwork is worth anything. In the first phase the employer share has not filled the $72,000 ceiling, so the deferral is pure addition and the gap is the entire $24,500. That phase runs from the smallest profit a business can have all the way to about $252,318, which covers the overwhelming majority of one-person businesses for their entire life. At $120,000 of profit the solo plan allows $46,804 against a SEP's $22,304. At $250,000 it allows $71,543 against $47,043 — still exactly $24,500 apart. In the second phase the employer share starts to fill the ceiling on its own, and every dollar it takes is a dollar the deferral can no longer use, so the gap narrows in a straight line. At $300,000 of profit the solo plan is at the $72,000 ceiling and a SEP is at $56,909, a gap of $15,091. In the third phase the SEP reaches $72,000 by itself and the gap closes completely, which happens at about $376,480 of profit: at $400,000 both plans allow exactly $72,000 and the solo 401(k) is not a better plan, it is the same plan with a Form 5500 attached. There is one exception to that closure, and it is the reason age matters so much here. The catch-up sits outside the ceiling and a SEP has no version of it at any age, so for anyone 50 or over the gap never falls to zero. Put 52 into the age field and $120,000 of profit supports $54,804 instead of $46,804, the personal ceiling for the year becomes $80,000, and even at $400,000 of profit — where the two plans have otherwise converged — the solo plan still allows $80,000 against a SEP's $72,000. The practical reading of the three phases is simple. Below a quarter of a million dollars of profit the deferral is worth five figures every year and there is no serious argument for a SEP unless the deadline is the problem. Above about $377,000 the only thing left to buy is the catch-up, and if you are under 50 there is nothing left to buy at all.
The wage question, and the spouse lever
Two levers on this page are larger than anything else on it, and both are structural rather than arithmetic. The first is whether your income arrives as Schedule C profit or as a W-2 wage from an S corporation. On a wage there is no half-SE-tax step and no reduced rate, because the corporation has already paid the payroll tax and the wage is measured net of it: the employer share is a flat 25% of the wage. A $100,000 salary therefore supports $49,500 in total, against the $46,804 that $120,000 of Schedule C profit supports. That looks like a clean win until you notice what it costs. The wage has to be a real one — the IRS's reasonable-compensation doctrine exists precisely to stop an owner paying themselves $30,000 and taking $200,000 as a distribution — and an owner who keeps the salary low to hold down payroll tax has simultaneously capped the employer share at 25% of that low salary and the deferral at the salary itself. Add the payroll service, the quarterly filings, the state registrations and a corporate return, and the S corporation route earns its keep at some incomes and loses money at others. It also changes the Roth catch-up question. From 2026 a catch-up must be made as Roth where your prior-year FICA wages from that employer exceeded $150,000, and the test is Box 3 of last year's W-2. Schedule C profit is not FICA wages and a sole proprietor has no Box 3 figure at all, so the mandate cannot reach one at any profit level — while an S corporation owner paying themselves above the threshold is caught by it. Being caught does not cost the catch-up, only the deduction on it. The second lever is a spouse who genuinely works in the business. They may join the same plan, on the same document, with the same provider and the same Form 5500-EZ, and they get their own $24,500 deferral, their own catch-up and their own employer share on their own compensation — a household ceiling of $144,000 before any catch-up is counted. Nothing else available to a small business doubles the number this cheaply. The word doing the work is genuinely: the compensation has to be real, documented and defensible as pay for actual services, which for a sole proprietorship means the spouse is a legitimate employee of the business and paid as one.
The rules that decide whether you may have one at all
A solo 401(k) is a one-participant plan, and the definition is strict: you, and a spouse who works in the business, and nobody else. Hire one non-spouse employee who completes 1,000 hours in a year — or 500 hours in each of two consecutive years, under the long-term part-time rule that SECURE 2.0 shortened from three years — and the plan stops being a one-participant plan the moment they become eligible. Nondiscrimination testing, a real plan administrator, an employer contribution for that person and a full Form 5500 all arrive together, and unwinding a plan mid-life is far more expensive than never having adopted it. The same test reaches employees of another business you control, under the controlled-group and affiliated-service-group rules, which is the trap for a consultant who also owns a share of something with staff. A business that expects to hire is usually better served by a SIMPLE or a safe-harbor 401(k) from the start. Deadlines come in two flavours and only one is generous. The plan has to exist before it can take money, but a sole proprietor may adopt a first-year plan after the year has ended — up to the due date of the return without extensions — and still make the employee deferral for that year, under SECURE 2.0 §317. Read both qualifiers: it is the first plan year only, and extensions do not extend it. Where there is a payroll the deferral had to be elected before the year closed, so an S corporation owner cannot repair a missed year in March. The employer profit share is easier in every year: it can be funded up to the filing deadline including extensions. Three smaller things worth carrying. Once total plan assets pass $250,000 at the end of a year, Form 5500-EZ is due annually; it is a short form with no audit, but the penalty for not filing is severe and the threshold arrives quietly, because it is the balance and not the year's contribution. The deferral may be Roth in almost every plan document, with no income limit of any kind — the Roth IRA phase-out has no application to a plan deferral, which makes this the largest Roth contribution most self-employed people can make. And a solo 401(k) can lend you money, up to the lesser of $50,000 or half the vested balance, which is a feature no IRA-based plan has and one of the quieter reasons people choose it.
Frequently asked questions
How much more does a solo 401(k) shelter than a SEP?
The employee deferral, until the employer share alone fills the ceiling. The employer halves of the two plans are identical to the dollar — same reduced rate, same compensation limit — so at $120,000 of profit both allow $22,304 of employer money, and the solo plan simply adds the $24,500 deferral on top for a total of $46,804. That $24,500 gap is flat all the way to about $252,318 of profit. From there it narrows, and at about $376,480 it closes: at $400,000 both plans reach $72,000 and there is nothing left to choose between them but paperwork.
Does the deferral count against the $72,000 ceiling?
Yes, and the catch-up does not. Annual additions are the deferral plus the employer share, and $72,000 is the ceiling on the pair of them — which is why the advantage narrows as profit rises rather than staying flat forever. The catch-up sits outside that figure, so a 52-year-old's real ceiling for the year is $80,000 and a 61-year-old's is $83,250. The page fills the deferral first and puts the employer share into whatever room is left, because that is how nearly every plan is funded: the deferral is not a percentage of anything, so it is the part a bad year cannot take away.
Can I still have a solo 401(k) if I hire someone?
Only if that someone is your spouse. A solo 401(k) is a one-participant plan covering you and a spouse who genuinely works in the business, and nobody else. Take on one non-spouse employee who works 1,000 hours in a year — or 500 hours in two consecutive years, under the long-term part-time rule — and the plan stops qualifying: nondiscrimination testing, a real administrator and employer contributions for that person all arrive together. A business that expects to hire usually chooses a SIMPLE or a safe-harbor 401(k) rather than unwinding a solo plan later.
Would an S corporation wage let me contribute more?
At a modest income, slightly — and it costs more to run. On a wage there is no half-SE-tax step, so the employer share is a flat 25% of the wage: a $100,000 salary supports $49,500 against the $46,804 that $120,000 of Schedule C profit supports. But the wage has to be a real one. An owner paying themselves a small salary to hold down payroll tax has capped the employer share at 25% of that salary and the deferral at the salary itself, and the payroll, the quarterly filings and the corporate return are all live costs the Schedule C route does not have.
When do I have to open the plan, and when do I have to fund it?
The two deadlines are different, and only one of them is generous. A sole proprietor may adopt a first-year plan after the year has ended, up to the due date of the return without extensions, and still make the employee deferral for that year — that is SECURE 2.0 §317, and it is newer than most advice on the subject. It covers the first plan year only. Where there is a payroll, the deferral had to be elected before the year ended, so an S corporation owner cannot fix it in March. The employer profit share is easier: it can be funded up to the filing deadline including extensions in any year.
Does the new rule forcing catch-ups to be Roth apply to me?
Not if your income is Schedule C profit. From 2026 a catch-up must be made as Roth where your prior-year FICA wages from that employer exceeded $150,000 — and the test is Box 3 of last year's W-2. Self-employment income is not FICA wages and a sole proprietor has no Box 3 figure at all, so the mandate cannot reach one at any profit level. An S corporation owner paying themselves over $150,000 is caught by it. Being caught does not cost you the catch-up; it costs you the deduction on it.