Solo 401(k) & SEP IRA contribution calculator

Find the most you can contribute for 2026 from your freelance profit, and how much federal income tax it saves.

Updated October 22, 2026 · Tax year 2026 · By Volkan Eren · Sources & method

Most you can contribute for 2026

Solo 401(k)

$43,087

SEP-IRA

$18,587

Maxing out the solo 401(k) would cut your 2026 federal income tax by about $5,243; the SEP-IRA by about $2,891. Contributions do not reduce self-employment tax.

Contribution limits by part
2026	Solo 401(k)	SEP-IRA
Employee deferral	$24,500	—
Employer contribution (20%)	$18,587	$18,587
Catch-up (age 50+)	$0	—
Total	$43,087	$18,587

Net earnings for the 20% employer contribution: $92,935 (profit minus half of self-employment tax). 2026 limits: $24,500 deferral, $72,000 total, $8,000 catch-up ($11,250 at ages 60–63). Federal tax only. Not tax advice.

How much can I put in a solo 401(k) or SEP IRA?

With $100,000 of 2026 net self-employment profit, a 40-year-old can contribute up to $43,087 to a solo 401(k): a $24,500 employee deferral plus an $18,587 employer contribution. A SEP IRA allows only the employer part, $18,587. Limits come from IRS Notice 2025-67.

Compare the two plans in depth in SEP IRA vs solo 401(k), then build the savings into your rate with the freelance rate calculator.

Frequently asked questions

What are the 2026 solo 401(k) limits?

Up to $24,500 as an employee deferral plus a 20% employer contribution, within $72,000 in total. Age 50 and older can add an $8,000 catch-up, or $11,250 at ages 60–63 (IRS Notice 2025-67).

How is the 20% employer contribution figured for a sole proprietor?

It is 20% of net earnings from self-employment: net profit minus the deductible half of self-employment tax. That 20% is the 25% plan rate after adjusting for the contribution itself (IRS Publication 560).

Do contributions lower self-employment tax?

No. Solo 401(k) and SEP IRA contributions reduce income tax only. Self-employment tax is figured on net profit before them.

Can I have a solo 401(k) if I have a job with a 401(k)?

Yes, but the $24,500 employee deferral limit is shared across all your 401(k) plans. Enter your deferrals at the other job and the calculator reduces the solo 401(k) deferral to match.

Estimates for educational and planning purposes only. HourFloor does not provide tax, legal or financial advice. Verify your numbers with a qualified tax professional.