Solo 401k Contribution Limits 2026
Ran your own plumbing business for 20 years? Electrician who went independent? Contractor tired of working for someone else? A Solo 401k lets you save up to $70,000 a year (or $77,500 if you're 50+)—way more than a regular IRA. Here's how it works.
2026 Solo 401k Contribution Limits
The IRS sets annual limits for Solo 401k contributions. Here's everything you need to know for 2026.
Under Age 50
Age 50 and Over
Catch-Up Eligible*Important Note on Employer Contributions
The employer contribution is calculated as 25% of W-2 wages (for S-corps/C-corps) or approximately 20% of net self-employment income (for sole proprietors/partnerships). The percentage difference is due to how self-employment income is calculated.
Understanding the Two Contribution Types
Solo 401k plans allow you to contribute as both an employee AND employer, maximizing your tax-advantaged savings.
Employee Deferral
This is the portion you elect to defer from your compensation. It's the same limit that applies to traditional 401k plans.
Employer Contribution
As the employer, you can make profit-sharing contributions up to 25% of compensation (or ~20% of net self-employment earnings).
Contribution Calculation Examples
See how much you can contribute based on your income level and business structure.
Example 1: High-Income Consultant (Under 50)
Max ContributionScenario: Self-employed consultant with $200,000 net self-employment income (after SE tax deduction).
Example 2: Part-Time Freelancer (Age 52)
Catch-Up EligibleScenario: Freelance designer with $75,000 net self-employment income.
Example 3: S-Corp Owner (Under 50)
W-2 WagesScenario: S-Corp owner paying themselves $120,000 in W-2 wages.
Contribution Deadlines for 2026
Different deadlines apply to different types of contributions. Plan ahead to maximize your savings.
Employee Deferral Deadline
Employee salary deferrals must be made by the end of the calendar year. You cannot retroactively elect to defer income after December 31st.
Employer Contribution Deadline
Employer profit-sharing contributions can be made up until your tax filing deadline, including extensions. For most: April 15, 2027 (or October 15 with extension).
Pro Tip: Plan Establishment Deadline
Your Solo 401k plan must be established by December 31st of the tax year for which you want to make contributions. The actual funding can occur later, but the plan documents must be in place before year-end.
Solo 401k vs SEP IRA Contribution Limits
Why Solo 401k often allows higher contributions than a SEP IRA at the same income level.
| Net SE Income | Solo 401k Max | SEP IRA Max | Difference |
|---|---|---|---|
| $50,000 | $33,500 | $10,000 | +$23,500 |
| $100,000 | $43,500 | $20,000 | +$23,500 |
| $150,000 | $53,500 | $30,000 | +$23,500 |
| $350,000+ | $70,000 | $70,000 | $0 |
* Examples shown for individuals under 50. Solo 401k advantage comes from the employee deferral component.