2026 Solo 401(k) vs SEP IRA Calculator

What does this calculator answer?

This calculator shows the maximum federal contribution room for a Solo 401(k) and a SEP IRA from the same Schedule C net profit. The headline is which plan lets you put more away and by how many dollars. It then separates the Solo 401(k) employee deferral, employer contribution, and catch-up. This is that job.

It does not estimate the income-tax value of a deduction or tell you which account, provider, or investment is best. The comparison assumes you are a sole proprietor with one defined-contribution plan and no employees other than a spouse. It uses the self-employed treatment in IRS Publication 560. Partners, farmers, ministers, S-corporation shareholder-employees, and people with common-law employees can need different inputs or plan rules.

Is this a Solo 401(k) vs SEP calculator?

Yes. This page is the Numerandi Solo 401(k) vs SEP calculator for 2026. It is also the contribution-limit comparison tool for those two plans.

Enter Schedule C net profit and your age on December 31. Other elective deferrals and W-2 Social Security wages start at $0 under Other plans and W-2 wages. The headline result is the Solo 401(k) maximum. Supporting lines show the SEP maximum, the dollar gap, and the Solo employee, employer, and catch-up pieces.

For how much you can contribute to a SEP, and the written limit rules rather than the dollar comparison, read SEP IRA contribution limits. That article owns the limit guide.

What should you enter?

Use 2026 Schedule C net profit for line 31 profit after ordinary business expenses. Do not enter gross receipts, owner draws, or bank deposits.

Use age at the end of 2026 for your age on December 31. That is the date that decides whether an age-based catch-up can apply.

Use other 2026 elective deferrals for amounts you already deferred to another 401(k), 403(b), or similar plan. The $24,500 regular deferral limit is person-wide. Open Other plans and W-2 wages if those fields are hidden.

Use other 2026 W-2 Social Security wages for wages from jobs outside this business. They can change the deductible half of self-employment tax used to derive plan earnings.

Who wins when?

A Solo 401(k) usually wins on federal contribution room. It can stack an employee deferral and any permitted catch-up on the same employer worksheet a SEP uses. A SEP can win on simplicity: there is no employee-deferral election, and you can often establish and fund it as late as the business return due date, including extensions. See the IRS SEP FAQs. A SEP does not produce a higher federal maximum on the Schedule C facts this calculator models.

Feature	Solo 401(k)	SEP IRA
Employee deferral	Up to $24,500 across applicable plans	None
Employer contribution	Publication 560 reduced-rate worksheet	Same worksheet at 20%
Catch-up, age 50 or older	Up to $8,000 when earned income remains	None
Higher catch-up, ages 60–63	Up to $11,250 in 2026	None
Annual-additions ceiling	$72,000; catch-up sits outside it	$72,000
Compensation counted	Capped at $360,000	Same compensation cap

Those 2026 dollar limits come from IRS IR-2025-111 and Notice 2025-67. The reduced self-employed rate is the Publication 560 treatment of a 25% plan rate. Your adopted plan can still set a lower limit.

The two federal maximums can match when the $72,000 annual-additions ceiling binds both sides, or when you already used the shared employee-deferral limit at another job and you are under age 50. Catch-up can still give the Solo 401(k) extra room after that ceiling if you have earned income left.

What are the 2026 self-employed retirement contribution limits?

You can defer up to $24,500 of employee salary deferrals across all 401(k), 403(b), and similar plans you participate in during 2026. Regular employee and employer additions to one defined-contribution plan share a $72,000 annual-additions ceiling. Compensation counted for those limits is capped at $360,000.

A Solo 401(k) stacks employee deferral, employer contribution, and any permitted catch-up. A SEP IRA is employer-funded only at the 20% reduced self-employed rate — there is no employee deferral and no catch-up. If you are at least 50 at year-end, a Solo 401(k) may allow up to $8,000 in catch-up beyond the regular deferral when you have enough earned income. If you attain age 60, 61, 62, or 63 in 2026, the higher catch-up is $11,250. Catch-up sits outside the annual-additions ceiling but still needs earned income.

The panel above your result lists each registered limit with its IRS source. Your plan document, another workplace plan, and the worksheet below can reduce what you can actually contribute.

How does the calculation work?

Your Schedule C net profit is not the final compensation figure. The IRS one-participant 401(k) guidance says a self-employed person's earned income reflects the deductible half of self-employment tax and contributions made for that person. Publication 560 handles that circular calculation with a reduced contribution rate and a worksheet.

The calculator first subtracts the deductible half of regular self-employment tax from your profit. It then applies the registered 20% self-employed rate — the reduced version of a 25% plan rate — along with the compensation and annual-additions caps above. For a Solo 401(k), your employee deferral uses the person-wide limit left after deferrals to another 401(k), 403(b), or similar plan. Your employer contribution fills additional room under the IRS worksheet. Age-based catch-up follows the limits in the section above when your plan permits it.

How does a worked 2026 example look?

The numbers below are the calculator's live defaults: $100,000 of Schedule C net profit, age 45 at year-end, and $0 of other elective deferrals or W-2 Social Security wages.

Regular self-employment tax produces a $7,064.78 deductible half, leaving $92,935.23 for the retirement worksheet.

Your SEP maximum is 20% × $92,935.23 = $18,587.05. A SEP has no employee deferral or catch-up. The IRS SEP FAQs describe it as employer-funded.

Your Solo 401(k) starts with a $24,500.00 employee deferral. The worksheet then allows an $18,587.05 employer contribution. You are under age 50, so catch-up is $0.00. Your total Solo 401(k) room is $43,087.05, which is $24,500.00 more than the SEP maximum for these facts. That gap is the unused employee-deferral limit, not extra employer room.

The same $100,000 profit at age 50 keeps the $18,587.05 employer piece on both sides and adds the $8,000.00 age-50 catch-up on the Solo 401(k) only. Your Solo total becomes $51,087.05, which is $32,500.00 more than the SEP. Those catch-up dollars come from IR-2025-111 and still need earned income.

Which mistakes can overstate your contribution room?

• Do not enter gross receipts, owner draws, or bank deposits as Schedule C net profit.
• Do not ignore another job. Enter both elective deferrals and Social Security wages from that job. Deferrals reduce your shared $24,500 limit, while wages can change your deductible half of self-employment tax.
• Do not add catch-up to a SEP employer contribution. SEP plans do not offer employee catch-up.
• Do not use this Schedule C result for an S corporation. Corporate employer contributions use W-2 compensation, and a defensible salary is a separate question.
• Do not assume “Solo” lets you exclude eligible workers. Hiring an employee can change plan coverage and testing obligations.

When should you use this calculator?

Use it when you report Schedule C profit and want to compare 2026 federal maximums for a Solo 401(k) versus a SEP before you open or fund a plan. That includes “solo 401k vs sep” and contribution-limit searches that need a number from the same profit, not a second calculator. Reconcile the deductible half of SE tax with the self-employment tax calculator. Compare entity and payroll paths with the LLC vs S-corp tax calculator. Revisit estimated payments without treating contribution limits as a full tax answer with the quarterly estimated tax calculator. For how much you can contribute to a SEP, and the written SEP and Solo 401(k) limit rules, read SEP IRA contribution limits.

What should you do with the result?

Confirm your final net profit and the deductible half of regular self-employment tax. Read your signed plan document to see which contribution types it permits. A federal ceiling is not a requirement to fund the maximum, and it is not a complete tax deduction.

Check establishment, election, and deposit deadlines with the provider. The IRS one-participant 401(k) guidance generally requires the plan to exist by year-end if you want employee deferrals for that year. Employer contributions can often wait until the business return due date, including extensions. A SEP can often be established and funded on that same return-due-date timeline; see the IRS SEP FAQs. If you have another workplace plan, reconcile the person-wide elective-deferral total before funding.

Rates are current as of September 2026. This calculator covers federal contribution ceilings, not state tax, plan fees, investment choices, deduction timing, Roth-versus-pre-tax tax effects, after-tax mega-backdoor contributions, Form 5500 filing, or employees other than the spouse disclosure above. Use final plan records and current IRS guidance before acting.