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

In 2026 you can defer up to $24,500 as the employee, plus an employer profit-sharing contribution of up to 20% of net self-employment income (25% of W-2 pay for an S-corp), with a combined cap of $72,000. Catch-up contributions raise the ceiling at 50-plus, with an enhanced catch-up at ages 60 to 63.

Why is a Solo 401(k) better than a SEP IRA for the self-employed?

Both allow the same profit-sharing contribution, but the Solo 401(k) adds a personal salary deferral ($24,500 in 2026) on top. At the same income, that lets you save roughly $24,000 more than a SEP. The Solo 401(k) also offers Roth contributions and, in some plan documents, a mega backdoor Roth.

What happens to my Solo 401(k) if I hire an employee?

A Solo 401(k) is only for an owner-only business (and a spouse). Once you hire a non-owner, non-spouse employee who meets the eligibility rules, the plan generally must convert to a regular 401(k) with testing and broader coverage. Plan the change before you hire, because the plan type has to change.

The Solo 401(k) in 2026: How the Self-Employed Save the Most

A Solo 401(k) is the highest-limit retirement plan available to a self-employed person with no employees. It lets you contribute as both the employee and the employer, which is why it beats a SEP IRA at the same income, adds a Roth option, and in the right plan document opens a mega backdoor Roth. Here is how it works in 2026, and the rules that trip people up.

By Jay Chang, VP, Wealth Advisor

Last updated July 18, 2026

What is a Solo 401(k), and who qualifies?

A Solo 401(k), also called an individual or one-participant 401(k), is a 401(k) for a business with no employees other than the owner and a spouse. Freelancers, consultants, single-member LLCs, and one-owner S-corporations all qualify. The moment you have a non-owner, non-spouse employee who meets the eligibility rules, you no longer qualify, and the plan must become a regular 401(k).

That single-participant status is what makes it powerful. With no other employees to cover, you can push the contribution to the legal maximum without nondiscrimination testing getting in the way.

How much can you contribute in 2026?

You contribute from two sides of the same business. As the employee, you can defer up to $24,500 in 2026. As the employer, you can add a profit-sharing contribution of up to 20% of net self-employment income (25% of W-2 wages if you are an S-corp). The two together are capped at $72,000 for 2026, before catch-ups.

2026 piece	Amount
Employee salary deferral	Up to $24,500
Employer profit sharing	Up to 20% of net SE income (25% of W-2 pay)
Combined cap (under 50)	$72,000
Catch-up, ages 50-59 and 64+	+$8,000
Enhanced catch-up, ages 60-63	+$11,250

Why it beats a SEP IRA at the same income

A SEP IRA only allows the employer profit-sharing piece. The Solo 401(k) allows that same piece plus your personal salary deferral. On identical income, that deferral is the whole difference, and it is worth about $24,000 a year.

Hypothetical example

A 45-year-old consultant with about $150,000 of net self-employment income and no employees could contribute roughly $28,000 to a SEP IRA, versus roughly $52,000 to a Solo 401(k). Same income, same profit-sharing math. The extra $24,000 is the salary deferral the SEP simply does not have.

Hypothetical illustration only, not a projection of actual results. Figures assume the stated inputs and returns, which are not guaranteed; your outcome depends on your contributions, investment returns, tax rates, and time horizon. Past performance does not guarantee future results.

Want to see the three main small-business plans side by side? The SEP vs SIMPLE vs Solo comparison lays them out, and you can compare all three against your own income.

Roth, and the mega backdoor

A Solo 401(k) can accept Roth contributions, so you can put the salary deferral in as after-tax Roth money and let it grow tax-free. Some Solo 401(k) plan documents go further and allow after-tax contributions with in-plan Roth conversions, the same mega backdoor Roth strategy that high earners use inside a corporate 401(k). Not every off-the-shelf Solo 401(k) supports it, so the plan document matters.

The rules that trip people up

The $250,000 filing line. Once plan assets pass $250,000, you file a short Form 5500-EZ each year. Miss it and the penalties are steep.
Deadlines split by contribution type. The employer profit-sharing piece can be funded up to your tax deadline, but the salary deferral election generally has to be in place by year-end.
Hiring ends it. Add an eligible non-owner employee and the plan must convert to a regular 401(k). Plan the change before the hire.
One 415 limit across plans. If you also participate in a W-2 employer's 401(k), your personal deferral limit is shared across both plans.

The IRS overview of one-participant 401(k) plans is the primary source for the filing and contribution rules.

Setting up or maxing out a Solo 401(k)?

I help self-employed savers pick a plan document that supports Roth and the mega backdoor where it fits, size the contribution correctly against the SE-tax math, and connect it to the rest of your plan. See the small business retirement plans page for how that works.

Schedule a Conversation with Jay

Disclaimer: This article is for educational purposes only and is not tax, legal, or investment advice. Contribution limits, deadlines, and the self-employed contribution calculation depend on your entity type and specific facts and can change; confirm the numbers with your CPA. Figures are 2026 limits and rounded illustrations, not projections of your results.