Solo 401(k) Contribution Calculator
A Solo 401(k) is uniquely powerful because you wear two hats: employee and employer. As the employee, you can defer up to $23,500 of your self-employment income in 2025 (plus catch-up if age 50+). As the employer, you can contribute an additional profit-sharing amount of up to 25% of your adjusted self-employment compensation. Combined, these two components can reach up to $70,000 in 2025, making the Solo 401(k) often the best choice for high-earning self-employed individuals who want to maximize retirement savings.
Solo 401(k) contribution formula (2025)
SE tax deduction = net income * 0.9235 * 0.153 / 2
Adjusted comp = net income - SE tax deduction
Employee deferral = min(net income, $23,500 + catch-up)
Profit-share = min(adjusted comp * 0.25, Section 415 limit - deferral)
Section 415 cap: $70,000 (age < 50) / $77,500 (50-59, 64+) / $81,250 (60-63)
Total = deferral + profit-share
The employee deferral reduces the available profit-sharing headroom under the Section 415 total limit. The profit-sharing is capped at 25% of adjusted compensation (net income less SE tax deduction) and the remaining Section 415 room after the deferral.
Solo 401(k) vs SEP-IRA comparison
- At lower income levels (under about $60,000), the Solo 401(k) typically allows larger contributions than a SEP-IRA because the employee deferral can be larger than 25% of adjusted income.
- Solo 401(k) allows catch-up contributions; SEP-IRA does not.
- Solo 401(k) can accept Roth (after-tax) deferrals; SEP-IRA is always pre-tax.
- Solo 401(k) may require Form 5500-EZ if plan assets exceed $250,000; SEP-IRA has no such filing requirement.
- Both must be established by specific deadlines (Solo 401(k) by December 31; SEP-IRA by tax filing deadline including extension).
Frequently asked questions
What is a Solo 401(k)?
A Solo 401(k), also called an individual 401(k) or one-participant 401(k), is a traditional 401(k) plan designed for self-employed individuals with no employees other than a spouse. It allows both employee elective deferrals and employer profit-sharing contributions, enabling much higher contribution limits than a SEP-IRA at lower income levels.
How are Solo 401(k) contributions different from SEP-IRA contributions?
A Solo 401(k) has two contribution components: (1) employee elective deferrals up to $23,500 (2025, plus catch-up if age 50+), and (2) employer profit-sharing of up to 25% of compensation. A SEP-IRA only allows the employer contribution component. At income below about $230,000, a Solo 401(k) typically allows higher total contributions than a SEP-IRA.
Can I make Roth contributions to a Solo 401(k)?
Yes, if your plan documents allow it. You can designate your employee deferral (up to $23,500) as Roth (after-tax) contributions. The employer profit-sharing portion is always pre-tax. Not all Solo 401(k) providers offer Roth options, so check with your provider.
What is the total Solo 401(k) limit for 2025?
The total annual additions limit under IRS Section 415 is $70,000 for 2025 (or $77,500/$81,250 with catch-up for ages 50-59/64+ and 60-63 respectively). This is the combined total of employee deferrals and employer profit-sharing contributions.
Do I need a special plan document for a Solo 401(k)?
Yes. You must adopt a written plan document to establish a Solo 401(k). Most brokerage firms offer prototype plan documents. The plan must be adopted by December 31 of the tax year in which you want to make contributions (unlike SEP-IRA, which can be established by the tax filing deadline).
Official sources
- IRS Publication 560: Retirement Plans for Small Business
- IRS: One-Participant 401(k) Plans
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.