Solo 401k Contribution Limits: How Much Can You Actually Put In This Year?

The contribution limit for a Solo 401k in 2026 is $70,000. Most people contribute a fraction of that because the math isn't obvious.

You're wearing two hats: employee and employer. Each hat has its own contribution rules, its own cap, and its own calculation. Get both right and you can shelter a serious amount of income from tax every year.

The two sides of a Solo 401k

Employee contributions are the easier part. You can contribute up to $23,500 in 2026, or 100% of your net self-employment income if that's less. If you're 50 or older, add a $7,500 catch-up contribution for a total of $31,000.

If you're 60, 61, 62, or 63, there's an additional "super catch-up" provision that raises the catch-up to $11,250 instead of $7,500. That's a 2025 SECURE 2.0 change that carries into 2026.

Employer contributions come from the business side. As the employer, you can contribute up to 25% of your adjusted net earnings — which is your net self-employment income after deducting half of your self-employment tax. This is the piece most people undercount.

The actual math

Start with your net self-employment income. Subtract half of your SE tax (Schedule SE, line 13). That gives you your adjusted net earnings. The employer contribution is 25% of that number.

Example: $120,000 net SE income.

• SE tax: $120,000 × 0.9235 × 15.3% = $16,958
• Half SE deduction: $8,479
• Adjusted net earnings: $120,000 - $8,479 = $111,521
• Employer contribution (25%): $27,880
• Employee contribution: $23,500
• Total: $51,380

The $70,000 cap is a ceiling, not a floor. Most people at $120,000 net income land somewhere in the $45,000-$55,000 range depending on age and filing details.

To hit the $70,000 ceiling on employer contributions alone, you'd need adjusted net earnings of $280,000 or more. Below that, the employer side is the binding constraint.

Solo 401k vs. SEP-IRA

The SEP-IRA has one contribution type: employer-side, 25% of adjusted net earnings, same formula. No employee contribution. No catch-up.

At any income level, the Solo 401k allows a larger total contribution because of the employee elective deferral that the SEP-IRA doesn't have. The gap is biggest at lower income levels, where the employee contribution represents a larger share of the total.

At $60,000 net income:

• Solo 401k: ~$12,900 employer + $23,500 employee = ~$36,400
• SEP-IRA: ~$12,900

That's a $23,500 difference in tax-sheltered dollars at the same income level.

The SEP-IRA wins on one dimension: simplicity. No plan document, no annual filings once assets exceed $250,000 (Form 5500-EZ). If you're late-stage and already saving heavily, it's less administration. For almost everyone else, the Solo 401k is the better vehicle.

The $250,000 Form 5500-EZ threshold

Once your Solo 401k plan assets exceed $250,000, you're required to file Form 5500-EZ annually. It's not complicated — it's a single-page form that reports the account balance and a few plan details. But you need to know it exists. Missing it carries a $250/day penalty up to $150,000. Set a calendar reminder for when your balance approaches that threshold.

Roth vs. traditional contributions

Many Solo 401k providers allow Roth contributions on the employee side. Traditional contributions reduce your taxable income now; Roth contributions don't, but the growth is tax-free at withdrawal.

If you expect to be in a higher bracket in retirement than you are today, Roth wins. If you're at peak earning years now, traditional wins. For most self-employed workers in the $100,000-$250,000 range, a traditional Solo 401k is the better immediate choice — the deduction today is worth more than the tax-free withdrawal decades from now.

When to open one

You need to open a Solo 401k by December 31 of the tax year you want to make contributions for. You can fund it up to your tax filing deadline (including extensions, so October 15 if you extend). But the plan must exist by year-end.

If you're already in October or November and don't have a plan, move fast. Vanguard, Fidelity, and Charles Schwab all offer Solo 401k plans at no cost. Schwab and Fidelity have the fewest restrictions on investment options.

Contribution limits and catch-up provisions are indexed annually by the IRS. The figures above are for the 2026 tax year. Verify current limits at irs.gov before filing.