For 2026, a Solo 401(k) lets you put in up to $24,500 as the employee, plus an employer contribution of 20% of your net profit after half of your self-employment tax, as long as the two together stay under $72,000. Catch-up contributions go on top of that. If you’re 50 or older the ceiling becomes $80,000, and if you turn 60, 61, 62 or 63 this year it’s $83,250. Every dollar figure comes from IRS Notice 2025-67.
Most people never reach the ceiling. What limits you in practice is your profit, because you can’t contribute more than you earned, and whether you already defer into a 401(k) at another job. The sections below take each limit in turn. If you’d rather skip to your own numbers, the Solo 401(k) contribution calculator does it in a few seconds.
The 2026 limits at a glance
| Limit | Amount | How it works |
|---|---|---|
| Employee deferral | $24,500 | Shared with every other 401(k) or 403(b) you defer into |
| Employer contribution | 20% or 25% | 20% of net profit after half of SE tax (sole proprietor); 25% of W-2 salary (S corp) |
| Employee plus employer | $72,000 | Or 100% of your compensation, if lower; per unrelated employer's plan |
| Catch-up, age 50 or older | $8,000 | On top of the plan limit |
| Catch-up, ages 60 to 63 | $11,250 | Replaces the 50+ amount; only if your plan allows it |
| Most one plan can take in | $72,000 / $80,000 / $83,250 | Under 50 / 50 or older / ages 60 to 63 |
| Pay that counts | $360,000 | Compensation above this isn't used for the employer share |
Employee deferral
- Amount
- $24,500
- How it works
- Shared with every other 401(k) or 403(b) you defer into
Employer contribution
- Amount
- 20% or 25%
- How it works
- 20% of net profit after half of SE tax (sole proprietor); 25% of W-2 salary (S corp)
Employee plus employer
- Amount
- $72,000
- How it works
- Or 100% of your compensation, if lower; per unrelated employer's plan
Catch-up, age 50 or older
- Amount
- $8,000
- How it works
- On top of the plan limit
Catch-up, ages 60 to 63
- Amount
- $11,250
- How it works
- Replaces the 50+ amount; only if your plan allows it
Most one plan can take in
- Amount
- $72,000 / $80,000 / $83,250
- How it works
- Under 50 / 50 or older / ages 60 to 63
Pay that counts
- Amount
- $360,000
- How it works
- Compensation above this isn't used for the employer share
Source: IRS Notice 2025-67 (2026 dollar limits under sections 402(g), 414(v), 415(c) and 401(a)(17)) and the IRS pages on one-participant 401(k) plans and catch-up contributions.
The first three rows decide most people’s maximum. The catch-up rows only matter from age 50.
The employee limit: $24,500, and it’s shared
You can defer up to $24,500 of your earnings in 2026, and never more than you made. That limit belongs to you, not to the plan. Every 401(k) or 403(b) you defer into counts against it, so if a day job already took $20,000 of your pay, you have $4,500 left for the Solo 401(k). Solo 401(k) and a 401(k) at Work shows how to split it, including catch-up.
The employer limit
A Solo 401(k) makes you both the employee and the employer, and the employer contribution has its own formula.
If you’re a sole proprietor or a single-member LLC, it’s 20% of your net profit minus half of your self-employment tax. In steps: take your Schedule C net profit, subtract the deductible half of self-employment tax, and multiply what’s left by 20%. The IRS plan rate is 25%, but your own contribution comes out of the same profit it’s figured on, and the IRS worksheet for the self-employed turns that into 20% of the base. SEP IRA for the Self-Employed explains why the rate comes out lower than people expect.
If you own an S corporation, the corporation is the employer and the contribution is 25% of the W-2 salary it pays you. Distributions don’t count, so a low salary means a low employer contribution. Pay above $360,000 isn’t counted either way.
Here is the sole proprietor version in full, for someone with $120,000 of net profit who is 52:
- 1$120,000
Net profit (Schedule C)
- 2$16,956
Self-employment tax
Figured as on Schedule SE
- 3−$8,478
Half of self-employment tax
- 4$111,522
Compensation base
Net profit minus half of SE tax
- 5$22,304
Employer contribution
$111,522 × 20%
- 6$24,500
Employee deferral
2026 limit
- 7$46,804
Employee plus employer
Under the $72,000 plan limit
- 8$8,000
Catch-up at 50 or older
Outside the plan limit
- 9$54,804
Maximum contribution
Same math as the Solo 401(k) contribution calculator. Each step is rounded to the dollar, as on the IRS worksheets, and the total stays below the compensation base plus catch-up.
The employer part, 20% of the base, is not 25% of the $120,000. It’s the first mistake people make, and it’s off by thousands of dollars.
The $72,000 plan limit, and catch-up on top
Your employee deferral and employer contribution together can’t pass $72,000, or 100% of your compensation if that’s lower. That limit applies to each unrelated employer’s plan on its own, so a 401(k) at work doesn’t use up any of it.
Catch-up contributions don’t count toward the $72,000. At 50 or older you can add $8,000. If you turn 60, 61, 62 or 63 during the year, the amount is $11,250 instead, and it replaces the $8,000 rather than adding to it. The 60 to 63 amount only works if your plan allows catch-up contributions, so check your plan document. Catch-up also can’t be more than you earned.
That’s how the ceiling reaches $80,000 at 50 or older and $83,250 at 60 to 63. For example, a sole proprietor with $300,000 of profit and no other plan can contribute $72,000 under 50, $80,000 at 55 and $83,250 at 61.
What your limit looks like at different incomes
| Net profit | Employee | Employer | Total, under 50 | Total, 50 to 59 | Total, 60 to 63 |
|---|---|---|---|---|---|
| $30,000 | $24,500 | $3,381 | $27,881 | $27,881 | $27,881 |
| $60,000 | $24,500 | $11,152 | $35,652 | $43,652 | $46,902 |
| $100,000 | $24,500 | $18,587 | $43,087 | $51,087 | $54,337 |
| $150,000 | $24,500 | $27,881 | $52,381 | $60,381 | $63,631 |
| $250,000 | $24,500 | $47,043 | $71,543 | $79,543 | $82,793 |
| $400,000 | $24,500 | $47,500 | $72,000 | $80,000 | $83,250 |
$30,000
- Employee
- $24,500
- Employer
- $3,381
- Total, under 50
- $27,881
- Total, 50 to 59
- $27,881
- Total, 60 to 63
- $27,881
$60,000
- Employee
- $24,500
- Employer
- $11,152
- Total, under 50
- $35,652
- Total, 50 to 59
- $43,652
- Total, 60 to 63
- $46,902
$100,000
- Employee
- $24,500
- Employer
- $18,587
- Total, under 50
- $43,087
- Total, 50 to 59
- $51,087
- Total, 60 to 63
- $54,337
$150,000
- Employee
- $24,500
- Employer
- $27,881
- Total, under 50
- $52,381
- Total, 50 to 59
- $60,381
- Total, 60 to 63
- $63,631
$250,000
- Employee
- $24,500
- Employer
- $47,043
- Total, under 50
- $71,543
- Total, 50 to 59
- $79,543
- Total, 60 to 63
- $82,793
$400,000
- Employee
- $24,500
- Employer
- $47,500
- Total, under 50
- $72,000
- Total, 50 to 59
- $80,000
- Total, 60 to 63
- $83,250
Run through the Solo 401(k) contribution calculator: no 401(k) at another job, maximum employee deferral. The employee and employer columns are for someone under 50. Small profits are limited by compensation itself, and from about $300,000 of profit the plan limit applies.
At low profits, compensation is the limit: you can’t put in more than you earned, so a $30,000 profit allows all of it, less half of self-employment tax. In the middle, the employee part stays at $24,500 while the employer part grows with your profit. From somewhere above $250,000 the $72,000 plan limit takes over and only catch-up adds anything.
An S corp owner works from salary instead. With an $80,000 W-2 salary and no other plan, the maximum is $44,500: $24,500 as the employee and $20,000 as the employer, which is 25% of the salary. The S corp savings calculator helps with the salary decision itself, and Is an S Corp Worth It? covers when the election pays off.
If you also have a 401(k) at another job
Say you’re under 50, you have $100,000 of net profit and you already deferred $20,000 at a day job. You have $4,500 of employee room left in the Solo 401(k), but the employer contribution doesn’t care about the day job. It stays 20% of your compensation base, $18,587, so the total is $23,087. The calculator has a field for what you’ve already deferred, and a field for how much you want to defer, so you can see the employer room that’s left.
Can You Have a SEP IRA and a 401(k) at the Same Time? covers the same problem for a SEP.
Common mistakes
- Figuring the employer share as 25% of net profit. For a sole proprietor it’s 20% of net profit minus half of self-employment tax.
- Treating the $24,500 as a limit per plan. It’s per person, across every 401(k) and 403(b) you defer into.
- Counting catch-up toward the $72,000. It sits on top.
- Expecting the contribution to cut self-employment tax. It lowers income tax only, as Does a Solo 401(k) Reduce Self-Employment Tax? shows.
- Waiting to decide your employee deferral. With a plan already in place, the deferral is decided by the end of the tax year, even if the money goes in later. The one exception is the first year: under section 317 of SECURE 2.0, a sole proprietor who is the plan’s only employee can adopt a new 401(k) after year-end and still elect to defer the prior year’s net self-employment earnings, as late as the tax return due date, not counting extensions (IRS). The rule is written for unincorporated businesses, so as the IRS describes it, it isn’t aimed at S corp owners, whose deferrals come out of payroll. The October 15 deadline guide explains what can wait until you file.
- Missing the Roth catch-up rule if you pay yourself a salary. Starting in 2026, plans with Roth features must take catch-up contributions as Roth when your wages from the plan sponsor in the prior year were more than $150,000 (Notice 2025-67 and the IRS catch-up page). For an S corp owner that’s the salary the corporation paid you in 2025. A sole proprietor’s profit isn’t wages from the plan sponsor, so as the IRS describes the rule it isn’t aimed at sole proprietors. The same test applies to the 401(k) at your day job, which your employer runs, so ask its plan administrator.
- Keeping a Solo 401(k) after you hire employees. The plan is for an owner with no eligible employees, or the owner and a spouse, as Solo 401(k) vs. SEP IRA explains.
- Opening the plan without an EIN. Do I Need an EIN for a Solo 401(k)? covers the paperwork.
To see how a contribution would change your tax, run the numbers in the Freelance Tax Calculator, and to compare the plan with a SEP IRA use the Solo 401(k) vs SEP IRA calculator. If a spouse earns income from the business, Can My Spouse Join My Solo 401(k)? explains how a second set of limits works. For a worked example with commission income, see Solo 401(k) for Real Estate Agents.
