Enter your net self-employment income, your entity type and your age. The tool computes the 2026 maximum contribution under a solo 401(k), a SEP-IRA, a SIMPLE IRA and a traditional or Roth IRA, and shows the self-employment tax arithmetic that sits underneath — the 92.35% net-earnings factor, the deduction for one half of self-employment tax, and the circular calculation that turns a 25% plan rate into 20% of earned income. Every figure is a statutory ceiling for 2026, sourced from irs.gov and listed at the foot of the page. None of them is a recommendation.
Your situation
2026 statutory maximums — ceilings, not targets
The four options, side by side
| Plan | 2026 maximum | How that number is built |
|---|
The arithmetic, shown
This is where most self-employed plan calculators quietly go wrong. Your contribution is not a percentage of your net profit. It is a percentage of earned income, which is a smaller number, arrived at in three steps — and then the employer piece is computed on a base that has itself been reduced by the contribution, which is circular and is why the familiar “25%” turns into 20%.
Net profit to earned income
Why the solo 401(k) allows more than a SEP at the same income
A SEP-IRA has one contribution: the employer’s. A solo 401(k) has two — an employee elective deferral of up to $24,500 in 2026, plus an employer profit-sharing contribution calculated exactly the same way the SEP’s is. The employer halves are identical, so at any income below the point where the § 415(c) limit binds, the solo 401(k) allows the SEP amount plus the deferral. That is the whole explanation, and it is why a SEP is rarely the larger number for someone with no employees.
The two converge at the top. Once 20% of earned income on its own reaches the 2026 § 415(c) limit of $72,000 — which happens at $360,000 of earned income, the compensation cap — the deferral has no room left and both plans max out at the same place, catch-up contributions aside. Between those two ends the solo 401(k) is ahead by up to the full deferral. A SEP-IRA still has real advantages: it can be opened and funded up to the extended due date of the return, there is no Form 5500, and there is no plan document to maintain. Those are administrative advantages, not contribution advantages, and they are worth something.
The SIMPLE IRA is the one that beats a SEP at genuinely low income, because a $17,000 deferral does not depend on a percentage of anything. At $40,000 of net profit a SEP allows roughly $7,400; a SIMPLE allows the deferral plus a 3% match. Its ceiling is lower at the top and an employer running a SIMPLE cannot maintain another qualified plan in the same year — the IRS is unambiguous that the employer “cannot have any other retirement plan”. The longer comparison is here, and the solo 401(k) has its own page.
Assumptions used — read these before trusting the number
- All 2026 figures. Elective deferral $24,500; age-50 catch-up $8,000; ages 60–63 catch-up $11,250 (and only at those four ages); § 415(c) overall limit $72,000; compensation cap $360,000; SIMPLE deferral $17,000 with a $4,000 catch-up at 50 and $5,250 at ages 60–63; IRA limit $7,500 with a $1,100 catch-up at 50. Sources are listed below.
- Self-employment tax is 15.3% on 92.35% of net profit — 12.4% for Social Security up to the 2026 contribution and benefit base of $184,500, and 2.9% for Medicare with no ceiling.
- The 0.9% Additional Medicare Tax is deliberately not included. It applies above $200,000 (single) or $250,000 (married filing jointly), and it is not part of the deduction for one half of self-employment tax — so leaving it out is correct for this calculation, not a shortcut. It is still a real tax you owe.
- The employer contribution assumes a 25% plan rate, which converts to 20% of earned income because the base is net of the contribution itself. Lower plan rates are permitted and produce smaller numbers.
- Catch-up contributions sit outside § 415(c), so the solo 401(k) figure can exceed $72,000 at 50 and over. Total contributions are still capped at 100% of compensation.
- The SIMPLE match is modelled at 3% of compensation, the standard requirement. The compensation cap is applied to it here; strictly, the cap governs the 2% nonelective alternative, which only matters above $360,000 of earnings. SECURE 2.0 also allows a higher deferral of $18,100 for what the IRS calls “certain applicable SIMPLE retirement accounts”; because the IRS news release does not spell out which plans qualify, this tool uses the general $17,000 and leaves the question with your CPA.
- Roth and traditional IRA limits are shared, not stacked. $7,500 is the combined 2026 total across both. Traditional IRA deductibility phases out between $81,000 and $91,000 of modified AGI for a single filer covered by a workplace plan, and Roth contributions phase out between $153,000 and $168,000 single and $242,000 and $252,000 married filing jointly. The tool shows the limit, not your eligibility, because it does not know your filing status or your modified AGI.
- Deadlines are not modelled and they differ. A solo 401(k) generally has to be established by the end of the tax year for employee deferrals to be possible for that year; a SEP can be opened and funded later; a SIMPLE has its own establishment window and a 2-year rule on distributions. Ask your CPA about dates before you ask about dollars.
- No state tax, no income tax, no deduction calculation. This page computes what you may contribute, not what you will save in tax and not what will be deductible.
- Nothing here is a recommendation of a plan, a provider, a contribution amount or an entity election. It is arithmetic on figures you supplied against published 2026 limits.
This is an estimate, not advice. The output above is arithmetic performed on the numbers you entered, under the assumptions printed on this page. It is not a recommendation, not a projection you should rely on, and not a substitute for a conversation with your CPA or a qualified adviser about your own situation.
Who this was built for
Statutory non-employees and owner-operators, mostly — real estate agents and loan officers, for whom no employer plan exists at all; rideshare and delivery drivers; truckers and owner-operators; travel agents working under a host agency; dancers and adult entertainers, who are almost never offered any of this; entertainment crew with loan-out corporations; and tipped workers with side income on a 1099. If your income is the lumpy part of the problem, start with the irregular-income planner first, then come back here. All seventeen audiences are here.
Common questions
Is this tax advice?
No, and it is important that it is not. Aduna Capital LLC is a California-registered investment adviser; we do not prepare tax returns and we do not provide tax or legal advice. What this page does is apply published 2026 Internal Revenue Code limits to numbers you typed, and show its working so a CPA can check it in a minute. The choice between these structures turns on your whole return, and it should be made with someone who has that return.
I have one part-time employee. Can I still use a solo 401(k)?
Generally no. A one-participant plan covers an owner with no employees, or that owner and a spouse. If an employee meets the plan's eligibility conditions they have to be included, and the plan stops being a solo 401(k) — it becomes a plan with coverage and nondiscrimination testing and, usually, employer contributions for staff. Eligibility conditions do real work here, and long-term part-time rules have tightened them. This is a question for a CPA or a third-party administrator, not a web page. We do this work.
Why does my contribution not equal 25% of my profit?
Two reasons, both shown in the arithmetic panel above. One half of your self-employment tax comes off net profit first (IRS Publication 560, Deduction Worksheet for Self-Employed); and the 25% is applied to compensation measured after the contribution, which by algebra is 20% of the figure before it. The 92.35% factor on line 2 is used only to compute the self-employment tax itself, on Schedule SE — it is not taken off the contribution base a second time. A calculator that multiplies your Schedule C profit by 0.25 will overstate your contribution by roughly a third.
Should I elect S-corp status to contribute more?
That is exactly the kind of question this page will not answer, and be wary of any tool that does. S-corp election changes your payroll, your tax filing, your reasonable-compensation exposure and your self-employment tax, and its effect on the plan base cuts both ways: contributions are computed on W-2 wages, so a low wage shrinks every number on this page. It is a decision for a CPA with your full picture, not a lever to pull for a contribution limit.
Sources
- IRS — Notice 2025-67, 2026 amounts relating to retirement plans and IRAs — the controlling 2026 cost-of-living adjustments
- IRS — 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 — IRA, Roth and SIMPLE figures and phase-out ranges
- IRS — COLA increases for dollar limitations on benefits and contributions — § 415(c), § 401(a)(17) and SEP figures in table form
- IRS — 401(k) and profit-sharing plan contribution limits — deferral, catch-ups and the overall limit
- IRS — One-participant 401(k) plans — who a solo 401(k) may cover, and the 25%-of-compensation employer piece
- IRS — Publication 560, Retirement Plans for Small Business — earned income, the rate table for the self-employed, SEP and SIMPLE rules
- IRS — SIMPLE IRA contribution limits — SIMPLE deferral, catch-ups and the 3% match
- IRS — SIMPLE IRA plan — 100-employee ceiling and the no-other-plan rule
- IRS — Retirement plans FAQs regarding SEPs — SEPs are employer-funded only, with no deferrals or catch-ups
- IRS — Topic no. 554, Self-employment tax — the 92.35% factor, the 15.3% rate and the Additional Medicare Tax thresholds
- SSA — Contribution and benefit base — the 2026 Social Security wage base of $184,500
Sources reviewed August 2026. Rules, rates and thresholds change; the linked originals are always the authority, not this page.
Deciding between these is a conversation, not a calculator
We will look at the plan against your actual income pattern, your entity, your CPA's view of your return and what you want the money to do. Fee-only, fees published, $0 to open and $50 a month ongoing, nothing to sell you.