Solo 401(k) Calculator (Self-Employed Individual 401k)
Enter your annual net profit (or W-2 compensation) and age to estimate the maximum contribution to a US Solo 401(k), an individual 401(k) for self-employed business owners with no employees, split into employee deferral and employer contribution.
What is a Solo 401(k)?
A Solo 401(k) (also called an Individual 401(k)) is a US 401(k) plan designed specifically for self-employed business owners with no employees. Unlike a SEP IRA (money.wealth.sep_ira_calculator), which only allows an employer contribution, a Solo 401(k) has a dual structure: you can contribute as an "employee" in addition to contributing as an "employer" based on a percentage of compensation.
This dual structure often lets you reach a higher total contribution than a SEP IRA from the same net profit. This tool supports both self-employed (sole proprietor) and employee/officer (W-2 compensation) cases, estimating the employee deferral, the employer contribution, and the combined maximum contribution.
How to use
- Choose your contributor type Select whether you are contributing as a self-employed sole proprietor or as an employee/officer based on W-2 wages
- Enter your annual net profit if self-employed Enter the annual net profit after business expenses, as reported on Schedule C
- Enter any W-2 wages already earned this year If you also have employment income outside your business, use it to correctly estimate the remaining Social Security wage-base room
- Enter your annual W-2 compensation if an employee/officer Enter the salary your corporation pays you
- Enter your age Used to determine eligibility for catch-up contributions at age 50+ and ages 60-63
Tips for getting more out of it
- A Solo 401(k) requires that you have no employees other than yourself (and a spouse). If you plan to hire employees in the future, consider transitioning to a regular 401(k) plan.
- If you also participate in a 401(k) at another job, the employee deferral limit ($24,500 for 2026) is aggregated across all plans, so be careful not to over-contribute.
- Unlike a SEP IRA, many providers allow you to take a loan against your Solo 401(k) balance.
- This tool only provides a simplified estimate. For the exact contribution amount, we recommend confirming with a tax professional or using the worksheets in the latest IRS Publication 560.
Use cases
Maximize tax-advantaged retirement savings as a sole proprietor
Check whether a Solo 401(k) lets you contribute more than a SEP IRA, informing which retirement account to choose
Estimate contributions after incorporating (e.g. S-corp)
If you pay yourself W-2 wages after incorporating, check the estimated employee deferral and employer contribution
Compare against a SEP IRA or a Traditional/Roth IRA
Combine with money.wealth.sep_ira_calculator and money.wealth.ira_calculator to compare which account allows a larger contribution from the same net profit
Plan for retirement including catch-up contributions
For ages 50+ and 60-63, check the maximum contribution including the extra catch-up contribution room
Glossary
- Solo 401(k)
- Also called an Individual 401(k), this is a 401(k) plan designed for self-employed business owners with no employees. You can contribute in the dual roles of "employee" and "employer".
- Employee deferral (elective deferral)
- The amount you can contribute as an "employee" from wages or net profit. The base limit for 2026 is $24,500, with additional catch-up contributions allowed at age 50+ and ages 60-63.
- Employer contribution (profit sharing)
- The amount you can contribute as an "employer", a percentage of compensation (25% for W-2 compensation, an effective 20% for self-employed net earnings).
- Catch-up contribution
- An additional contribution allowance for age 50+ ($8,000 for 2026) and ages 60-63 (a higher $11,250 for 2026 under SECURE 2.0). It is not counted toward the annual additions limit.
- Annual additions limit
- The combined limit on the employee deferral and employer contribution (excluding catch-up contributions), $72,000 for 2026.
- Self-Employment Tax
- The combined Social Security and Medicare tax paid by self-employed individuals. Regular employees split this with their employer, but the self-employed pay both halves (15.3% combined).
Frequently asked questions
Side Note — A huge tax shelter built for one
The Solo 401(k) is a relatively new option, expanded for the self-employed by the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. Its dual structure, where the same person contributes as both "employee" and "employer", is unique: in a regular corporate 401(k), the employee deferral and the employer match come from two separate parties, whereas in a Solo 401(k) one person plays both roles.
This dual structure often lets a Solo 401(k) reach a higher total contribution than a SEP IRA, and the gap is especially noticeable for self-employed individuals with a modest net profit. For example, with $50,000 in net profit, a SEP IRA (employer contribution only, an effective 20%) would cap out around $8,500, while a Solo 401(k) can add the $24,500 employee deferral on top, substantially raising the total possible contribution.
Comparable programs in Japan include the Small Enterprise Mutual Aid (Kokyosai), the National Pension Fund, and iDeCo (individual-type defined contribution pension). All of these support retirement savings for the self-employed and small business owners, but the US approach of splitting the contribution limit into separate "employee" and "employer" roles is a distinctive feature not found in Japan's programs.