Calculate your maximum solo 401k contribution as a sole proprietor or S-corp owner. Includes employee deferral, employer profit-sharing, Roth sub-account, and catch-up amounts for 2026.
Self-employed workers who use a SEP IRA instead of a solo 401k may be leaving $15,000 or more in tax-advantaged contributions on the table each year. Enter your income and entity type below to see your maximum 2026 contribution and estimated tax savings.
Last reviewed May 2026
How your solo 401k maximum changes at different W-2 salary levels. Your current salary is highlighted. S-corp owner must pay reasonable W-2 compensation -- this table is for planning context, not a recommendation.
| W-2 Salary | Employer 25% | Employee Deferral | Total Solo 401k | IRC 415 Headroom |
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The calculation is not the same for everyone. The formula for an S-corp owner uses 25% of W-2 wages for the employer contribution. The formula for a sole proprietor uses 20% of adjusted net self-employment income. The numbers sound similar but they diverge meaningfully at higher income levels, and they come from different parts of the tax code.
Here is why they differ. An S-corp owner pays FICA (payroll tax) only on their W-2 salary, not on distributions. The employer profit-sharing contribution is calculated as 25% of that W-2 compensation. A sole proprietor pays self-employment tax on their entire net profit. When the IRS built the sole proprietor formula, they adjusted the employer contribution base downward to account for the self-employment tax deduction, and the math works out to 20% of net SE earnings after the SE tax deduction.
Starting in 2025, the SECURE 2.0 Act created a catch-up contribution window that most financial planning tools have not yet modeled correctly. Here is how it works.
If you are under 50, you get only the standard elective deferral limit. If you are 50 or older (but not 60-63), you get the standard catch-up contribution of $7,500 (2025 amount, subject to IRS indexing for 2026). If you are between ages 60 and 63 specifically, you get the super catch-up, which is $11,250 for 2025. At age 64, you revert to the standard $7,500 catch-up.
That age 64 reversion catches many people off guard. There is a four-year window (60, 61, 62, 63) where you can contribute an extra $3,750 per year compared to age 50-59. Then at 64 you step back down. If you are currently 58 or 59, it is worth planning the timing of large contributions to capture the super catch-up window.
The SEP IRA is the default "self-employed retirement plan" that most accountants and brokerages suggest. It is simple to set up and easy to fund. The contribution is calculated as 25% of net self-employment compensation (with a SE tax deduction adjustment that produces roughly 20% of net SE earnings for sole proprietors). For 2025, the SEP IRA maximum is $70,000 (the same IRC 415 limit), but only through the employer profit-sharing mechanism.
The problem with a SEP IRA is that it has no employee elective deferral. No equivalent of the $23,500 bucket. Every dollar in the SEP IRA goes through the employer profit-sharing formula. That means to hit $23,500 in a SEP IRA, you would need roughly $117,500 in net SE earnings ($117,500 x 20% = $23,500). With a solo 401k, you can contribute up to $23,500 as an elective deferral even at much lower income levels, plus whatever the employer profit-sharing formula generates on top.
At income levels below approximately $40,000-$50,000, the solo 401k still pulls ahead of the SEP IRA because the elective deferral does not depend on income (it is a flat limit). At income above that, both plans approach similar numbers but the solo 401k continues to allow a larger total contribution until the employer profit-sharing in a SEP IRA alone exceeds the solo 401k's combined maximum.
S-corp owners face a unique planning lever that sole proprietors do not. The employer profit-sharing contribution (25% of W-2 wages) means that a higher W-2 salary generates a higher employer contribution. A lower W-2 salary generates a lower employer contribution.
This creates a tension. Taking a lower W-2 salary reduces payroll taxes (FICA). Taking a higher W-2 salary increases solo 401k contribution room. The salary optimization table in the calculator above shows this tradeoff. There is no universally correct salary. The IRS requires "reasonable compensation" for the work you perform, and setting a W-2 salary that is unreasonably low is the most common S-corp audit trigger.
Work with a CPA who understands S-corp compensation requirements before changing your W-2 salary level for retirement planning purposes. The calculator shows the math; a qualified professional helps you evaluate whether the salary is defensible.
The maximum depends on your income, entity type, and age. The IRS IRC Section 415 annual additions limit caps total contributions at $70,000 for 2025 (2026 amount pending IRS Revenue Procedure announcement, typically in November of the prior year). S-corp owners can contribute up to the elective deferral limit plus 25% of W-2 wages. Sole proprietors can contribute the elective deferral limit plus 20% of adjusted net self-employment income. Those 50 and older add catch-up contributions. Those ages 60-63 can use the SECURE 2.0 super catch-up.
An S-corp owner who is also a W-2 employee of their S-corp contributes in two ways. First, as an employee, they make an elective deferral from their W-2 salary (up to the annual limit). Second, the S-corp contributes employer profit-sharing (up to 25% of W-2 wages) as a deductible business expense. The combined total is capped at the IRC 415 limit. The W-2 salary level sets the ceiling on the employer profit-sharing contribution, which is why salary planning matters for solo 401k optimization.
The key difference is that a solo 401k allows both an employee elective deferral and an employer profit-sharing contribution, while a SEP IRA allows only the employer-side contribution. For most self-employed people with income above roughly $40,000, a solo 401k allows significantly higher total contributions than a SEP IRA at the same income level. A SEP IRA is simpler to administer. A solo 401k requires a plan document and generally cannot cover employees other than a spouse.
Yes. A solo 401k plan can include a Roth sub-account. You designate any portion of your employee elective deferral as Roth at the time of contribution. Roth contributions are made after-tax and grow tax-free. Unlike a Roth IRA, there is no income limit for Roth solo 401k contributions. High earners who are phased out of the Roth IRA can still make Roth contributions through a solo 401k. The employer profit-sharing contribution is always traditional (pre-tax) -- it cannot be designated as Roth.
The SECURE 2.0 Act of 2022 created an enhanced catch-up contribution for retirement plan participants ages 60 through 63. For 2025, the super catch-up is $11,250, compared to the standard catch-up of $7,500 for those 50 and older. This super catch-up applies only during the four-year window from age 60 to 63. At age 64, you revert to the standard $7,500 catch-up. 2026 amounts are subject to annual IRS indexing via Revenue Procedure.
Yes, but the elective deferral limit applies across all plans combined. For 2025, the total elective deferral across all 401k plans cannot exceed $23,500. If you contribute $15,000 to your employer's 401k, you have only $8,500 remaining for your solo 401k elective deferral. The employer profit-sharing contribution from your S-corp or self-employment is separate and is not subject to the elective deferral limit (only the IRC 415 overall limit applies).
Disclaimer. This calculator is designed to estimate solo 401k contribution maximums based on current IRS guidelines. Results are for educational and planning purposes only. Contribution limits, catch-up amounts, and employer match percentages may change annually. The S-corp salary optimization output is illustrative only. IRS rules require S-corp owner-employees to receive reasonable compensation. Consult a CPA or financial advisor before establishing or contributing to a solo 401k.
Contribution limits shown use 2025 IRS figures as planning estimates. 2026 official limits are announced by the IRS via Revenue Procedure, typically in late 2025. Check IRS.gov/retirement-plans for confirmed 2026 amounts before filing.