Solo 401(k) contribution limits for 2026

How much can I contribute to a Solo 401(k) in 2026?

The 2026 numbers below come from IRS Notice 2025-67, the annual cost-of-living adjustment notice. A Solo 401(k), also called an individual 401(k) or one-participant 401(k), uses the same dollar limits as any other 401(k) plan. What makes it different is that one person can fund it wearing two hats, employee and employer, which is covered in the next section.

Source: IRS Notice 2025-67, "2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living."

Everyone under 50 tops out at $24,500 in deferrals plus the employer piece, capped by the $72,000 combined ceiling. At 50 to 59, or 64 and up, the $8,000 catch-up raises that ceiling to $80,000. At 60 to 63 specifically, a larger "super catch-up" created by SECURE 2.0 raises it further to $83,250; it replaces the regular catch-up for those four years rather than stacking on top of it. For the full picture across 401(k)s and IRAs generally, see 2026 contribution limits.

What's the difference between the employee and employer contribution?

A Solo 401(k) covers a business owner with no employees other than possibly a working spouse (see Solo 401(k) eligibility for who qualifies). Because that one person is both the "employee" and the "employer" of the plan, they can fund it two ways, and the two stack:

• Employee elective deferral: up to $24,500 in 2026, the same as any W-2 401(k) participant defers from their own pay or self-employment earnings.
• Employer nonelective (profit-sharing) contribution: a contribution the business makes on the owner's behalf, up to 25% of compensation. For an S-corp owner, "compensation" means actual W-2 wages. For a sole proprietor or single-member LLC, there is no W-2, so the 25% figure has to be translated into an equivalent rate applied to net self-employment earnings, which works out to about 20%. Both calculations are walked through step by step below.

This dual-hat structure is why a Solo 401(k) allows so much more than a SEP-IRA or a personal IRA at moderate income. A consultant earning $80,000 can defer the full $24,500 as "employee" well before running into a 25%-of-compensation employer cap, something a SEP-IRA-only plan, which has no separate deferral bucket, cannot match.

How do I calculate my Solo 401(k) contribution if I'm self-employed (sole proprietor or single-member LLC)?

This is the step the IRS's own worked example walks through on its "Self-employed individuals: Calculating your own retirement plan contribution and deduction" page, and it is the piece most calculators skip. The mechanics, applied to a 2026 example:

Example: sole proprietor, net Schedule C profit of $150,000, under age 50.

1. Start with net profit. Net Schedule C profit = $150,000.
2. Compute the SE-tax base. Under IRC §1402(a), multiply net profit by 92.35% to get the amount the self-employment tax is figured on: $150,000 × 92.35% = $138,525. (This 92.35% figure is used ONLY to calculate the SE tax, not the retirement-contribution base.)
3. Compute self-employment (SE) tax on Schedule SE. All $138,525 falls under the 2026 Social Security wage base of $184,500 (confirmed directly on ssa.gov; see the sourcing note below), so the full amount is subject to the combined 15.3% SE tax rate: $138,525 × 15.3% ≈ $21,194.
4. Deduct one-half of the SE tax. This deduction is claimed on Schedule 1 of Form 1040: $21,194 ÷ 2 ≈ $10,597.
5. Get the contribution base. Per the IRS Publication 560 worksheet, this is net profit minus the half-SE-tax deduction: $150,000 − $10,597 = $139,403. (It is net profit reduced by half the SE tax, NOT the 92.35% figure reduced by it, a common mistake that understates the contribution.) This is the base the employer contribution is calculated against, before the contribution itself is subtracted.
6. Apply the reduced rate, not 25%. The employer contribution is itself a deduction from that same $139,403 base, which creates a circular calculation (the contribution depends on compensation, and compensation depends on the contribution). The IRS resolves this by applying a reduced rate to earnings measured before the contribution is subtracted: for the maximum 25%-of-compensation plan, the equivalent rate is 25% ÷ 125% = 20%. That is why sole proprietors are told they can put away "about 20% of net earnings," while S-corp employer contributions are described as "25% of wages": the two numbers describe the same rule against two different bases.
7. Calculate the employer contribution. $139,403 × 20% ≈ $27,881.
8. Add the employee elective deferral. Up to $24,500 (2026), chosen separately from the employer piece.
9. Total contribution: $27,881 + $24,500 ≈ $52,381, comfortably under the $72,000 combined 415(c) ceiling and the $360,000 compensation cap.

The IRS's own published example uses smaller numbers but the identical mechanic: a hypothetical business owner with $100,000 net profit and a stated 10% employer rate gets a reduced rate of 10% ÷ 110% = 9.0909%, applied to post-SE-tax-deduction earnings of $92,935, for an $8,449 employer contribution. The math is the same at any target rate: divide the stated rate by (100% plus that rate) to get the rate you actually apply to earnings before the contribution.

Source: IRS, "Self-employed individuals: Calculating your own retirement plan contribution and deduction," and Publication 560.

Sourcing note: the $184,500 figure used in step 3 is the 2026 Social Security wage base, a Social Security Administration number, not an IRS one. It is confirmed directly on ssa.gov's Contribution and Benefit Base page and only affects the SE-tax calculation in this worked example; it does not change any 401(k) contribution limit itself. Because the SSA updates this figure independently of the IRS's retirement-plan notice, double-check it against ssa.gov before relying on it in a given year.

Why can't I contribute until I know my net profit?

For a sole proprietor, the employer contribution is a percentage of adjusted net earnings from self-employment, a number that only exists once the year's books are closed. Net profit can move between now and December 31 as invoices come in, expenses land, or a client pays late, and both net earnings from self-employment and the SE-tax deduction are calculated directly from that final net profit figure. Guessing early and overfunding creates an excess contribution that has to be corrected; guessing low leaves money on the table. In practice this means the employer contribution amount is not truly known until year-end, which is also why the deadline to fund it stretches well past December 31, all the way to the business's tax-filing deadline including extensions (covered below). An S-corp owner does not face this problem in the same way, because the employer contribution is based on W-2 wages the business already set and paid during the year.

How does a Solo 401(k) work for an S-corp owner?

For an S-corp (or C-corp) owner-employee, the base is W-2 wages actually paid, not the business's net profit and not K-1 distributions. The employee elective deferral works exactly like a normal payroll deduction, and the employer nonelective contribution is capped at 25% of W-2 wages, deductible by the corporation.

Example: S-corp owner paid $100,000 in W-2 wages for 2026, under age 50.

1. Employee elective deferral: up to $24,500.
2. Employer contribution: 25% × $100,000 = $25,000.
3. Total: $24,500 + $25,000 = $49,500, against the $72,000 combined ceiling.

Because the base is W-2 wages, not profit, this is where the "reasonable compensation" question S-corp owners already navigate for payroll-tax reasons directly caps retirement contributions too: a corporation that pays a deliberately low salary to reduce payroll tax also shrinks the 25% employer-contribution base. One more wrinkle applies only above a wage threshold: starting 2026, anyone whose prior-year wages from the sponsoring employer exceeded $150,000 must make any catch-up contribution as Roth (after-tax) rather than pre-tax, a SECURE 2.0 rule confirmed in the IRS's cost-of-living notice. This generally does not affect sole proprietors, since the rule is keyed to FICA wages, not net self-employment income, but it does apply to S-corp owners paying themselves above that wage level.

Where does my Solo 401(k) contribution go on my tax return?

The two contribution types are reported differently depending on how the business is structured:

• S-corp: the employee elective deferral runs through payroll and shows up in W-2 Box 12 (Code D for a traditional pre-tax deferral, Code AA for a designated Roth deferral). The employer's nonelective contribution is a corporate income-tax deduction claimed on the S-corp's own return (Form 1120-S), not on the owner's personal Form 1040.
• Sole proprietor or single-member LLC: both pieces flow through the individual's Form 1040. The deduction for the self-employed retirement contribution (employee deferral plus employer piece, combined) is claimed on Schedule 1, while net profit itself still comes from Schedule C. There is no separate business return for a disregarded single-member LLC.

Timing matters too, and it is not the same for both structures. A 401(k) deferral election generally has to be made before the compensation it applies to is earned, so an S-corp owner needs a real payroll deferral election and withholding in place before year-end. A narrow exception, confirmed directly on the IRS's own Issue Snapshot covering deductibility of employer contributions made after the tax year ends, lets a sole proprietor with no other employees make the elective-deferral decision for the prior year retroactively, by the individual's tax-filing deadline, because a sole proprietor has no real-time payroll to withhold from in the first place. That exception does not extend to S-corp owner-employees.

When is the deadline to fund my Solo 401(k) contribution?

Two deadlines matter, and they are different for the two contribution types:

• Plan adoption: the business can adopt the plan itself as late as its tax-filing deadline, including extensions, and treat it as adopted on the last day of the prior tax year. This is what lets someone realize in March that last year was a strong year and still open a Solo 401(k) and fund an employer contribution for it.
• Employer contribution funding: deductible if paid by the business's tax-filing deadline, including extensions.
• Employee elective deferral: for an S-corp owner, the deferral election and withholding must be in place before year-end, no retroactive fix. For a sole proprietor with no other employees, the narrow retroactive exception described above allows the deferral decision itself to wait until the individual tax-filing deadline.

This is exactly why a sole proprietor's employer contribution can wait for finalized books: the funding deadline is built to accommodate it.

Do I have to file anything for my Solo 401(k)?

Most years, no. But once the plan's total assets, combined across every one-participant plan the same employer maintains, exceed $250,000 at plan-year end, the business must file Form 5500-EZ. The deadline is the last day of the 7th month after the plan year ends (July 31 for a calendar-year plan), and it can be extended using Form 5558. Late filing carries a penalty of up to $250 per day, capped at $150,000 per year. A plan in its final year, being terminated or rolled out, must file regardless of whether it ever crossed the $250,000 threshold.

The flat truth: one contribution is simple, the other waits on your books

The employee deferral is the easy half: decide a number, elect it, and (for an S-corp owner) it comes out of payroll like clockwork. The employer half is where the confusion lives, and the confusion is really just two things: a rate that looks like 20% for a sole proprietor and 25% for an S-corp owner because they are the same rule applied to two different bases, and a number that cannot be pinned down until the year's net profit is final. Neither is a flaw in the plan. The reduced rate keeps the math internally consistent, and the delayed deadline exists specifically so a sole proprietor is never forced to guess. If you run more than one business, stop here and check controlled-group status first, since that changes whether a Solo 401(k) is even available; see Solo 401(k) with multiple businesses.