Solo 401(k) contribution calculator

How the Solo 401(k) works

A Solo 401(k) — also called an Individual 401(k) or Self-Employed 401(k) — is a retirement plan available to self-employed individuals and business owners with no full-time employees other than a spouse. It combines two types of contributions:

Employee elective deferral

As the employee, you can defer up to $23,500 of your self-employment income in 2025 (or your net compensation if less). This is the same limit as a W-2 employee's 401(k) deferral.

Employer profit-sharing contribution

As the employer, you can contribute up to 20% of your adjusted net self-employment earnings (net profit minus the deductible half of your self-employment tax). For W-2 employees this rate is 25%, but for self-employed the effective rate is 20% due to the circular dependency in the IRS calculation (IRS Pub. 560, Worksheet 1).

Annual additions limit

The employee deferral plus the employer contribution cannot exceed $70,000in 2025. Catch-up contributions (for those 50 and older) are on top of this limit.

Catch-up contributions (SECURE 2.0)

Starting in 2025, the SECURE 2.0 Act created a two-tier catch-up system:

• Ages 50–59 and 64+: standard catch-up of $7,500.
• Ages 60–63: enhanced catch-up of $11,250 (150% of the standard amount).

Why the adjusted net earnings figure matters

You deduct half your self-employment tax before calculating the employer contribution. On $100,000 of net profit, the deductible half-SE-tax is roughly $7,065, leaving an adjusted base of about $92,935. The employer contribution is 20% × $92,935 ≈ $18,587. This is why the effective employer contribution rate (relative to gross net profit) is slightly under 20%.

Worked examples

Example 1 — freelancer, age 35, $80,000 net profit:

Example 2 — consultant, age 62, $200,000 net profit (SECURE 2.0 enhanced catch-up):

Assumptions and limitations

• No full-time employees other than a spouse. If your business has eligible employees (other than a spouse), you cannot use a Solo 401(k). Consider a SEP-IRA or SIMPLE IRA instead.
• SE tax uses a simplified approximation. The calculator uses the IRS formula (net profit × 0.9235 × SE tax rates) to estimate the deductible half of SE tax. For income above the Social Security wage base ($176,100 in 2025), only the Medicare rate applies to the excess — the calculator handles this correctly. The 0.9% Additional Medicare Tax on earnings above $200,000 (single) or $250,000 (MFJ) is not included in the half-SE-tax deduction.
• Profit-sharing uses the 20% effective rate. For self-employed, the IRS uses a circular formula (contribution = 25% of (compensation − contribution)), which simplifies to 20% of net compensation. The calculator applies this correctly.
• 2025 contribution limits. The limits shown ($23,500 employee deferral, $70,000 annual additions, $7,500 / $11,250 catch-up) are the 2025 IRS limits. The 2026 limits have not been confirmed in this calculator — check IRS.gov and update the data file when published.
• No SEP-IRA or SIMPLE IRA interaction. If you participate in other employer plans, your employee deferral limit is shared across all plans. The Solo 401(k) employer contribution limit is separate.

Frequently asked questions

Can I use a Solo 401(k) if I also have a W-2 job?

Yes, but your employee elective deferral limit ($23,500) is shared across all employer plans you participate in for the year. You can still make the full profit-sharing employer contribution from your self-employment income.

How does a Solo 401(k) compare to a SEP-IRA?

A SEP-IRA is simpler — only employer contributions, up to 20% of adjusted net earnings (same as the Solo 401(k) employer piece), capped at $70,000. A Solo 401(k) lets you add the employee deferral ($23,500) on top, making it much more powerful for lower-to-moderate income self-employed workers. At high income, the SEP-IRA and Solo 401(k) employer contribution max out at the same dollar amount.

What is a Roth Solo 401(k)?

The employee elective deferral portion can be designated as Roth (after-tax), in which case contributions don't reduce taxable income today but qualified withdrawals are tax-free. The employer profit-sharing contribution cannot be Roth. This calculator estimates the pre-tax savings from a traditional (pre-tax) Solo 401(k).

When must I establish the plan?

You must establish the Solo 401(k) by December 31 of the tax year for which you want to make contributions (the SECURE Act extended this to the tax filing deadline including extensions for plans established after 2019). Contributions can generally be made up to the tax-filing deadline.

What records do I need?

The plan requires a written plan document from your plan provider (Fidelity, Vanguard, Schwab, or a solo 401(k) plan document service). Once total plan assets exceed $250,000, you must file Form 5500-EZ annually with the IRS.