Compare the two plans using your numbers.
START HERE
Enter your Schedule C profit
Use net profit after ordinary business expenses, but before your own retirement-plan contribution.
STEP 2 · RESULT
Your estimated 2026 contribution capacity
A larger contribution can defer more current income tax, but the money remains retirement savings — not free cash.
How the three plan totals are builtSolo 401(k), SEP IRA and owner-only SIMPLE IRAOpen −
| Employee elective deferral | $0 |
|---|---|
| Employer nonelective contribution | $0 |
| Catch-up contribution | $0 |
| Adjusted net earnings after ½ SE tax deduction | $0 |
| SIMPLE salary reduction | $0 |
| SIMPLE 3% employer match | $0 |
| SIMPLE catch-up contribution | $0 |
| SIMPLE Schedule SE net-earnings base | $0 |
| QBI deduction before retirement contribution | $0 |
| QBI deduction after Solo 401(k) contribution | $0 |
| QBI deduction after SEP IRA contribution | $0 |
| QBI deduction after SIMPLE IRA contribution | $0 |
Tax deferral is not tax elimination. Traditional deductible contributions can reduce current taxable income, but distributions can be taxable later. The calculator estimates current-year federal income-tax reduction only and does not treat retirement contributions as business expenses for self-employment tax.
Solo 401k calculator and SEP IRA calculator: compare 2026 contribution limits
This page works as both a Solo 401k contribution calculator and a SEP IRA contribution calculator for the owner-only sole-proprietor scope described above. It calculates each plan separately, then shows which plan has the larger modeled deductible contribution capacity.
Solo 401k vs SEP IRA contribution limits 2026
| 2026 limit | Solo 401(k) | SEP IRA |
|---|---|---|
| Employee elective deferral | Up to $24,500, reduced by elective deferrals already made elsewhere | Not available as a separate employee deferral |
| Employer contribution | Available under the self-employed contribution calculation | Available under the self-employed contribution calculation |
| Annual-addition cap | $72,000 before eligible catch-up contributions | $72,000 |
| Catch-up contribution | $8,000 at age 50+, or $11,250 at ages 60–63 | No SEP IRA catch-up contribution |
This Solo 401k vs SEP IRA chart summarizes the headline limits. Your actual contribution can be lower because self-employed compensation, half of self-employment tax, prior elective deferrals and other plan rules affect the calculation.
Common calculator questions
Is this a Solo K calculator? Yes. “Solo K,” “individual 401(k),” “one-participant 401(k)” and “Solo 401k” are commonly used for the same owner-only 401(k) planning question.
Does the SEP calculator use 25% of Schedule C profit? Not directly. For a self-employed owner, the IRS reduced contribution-rate calculation is required; the calculator models that interaction rather than simply multiplying Schedule C profit by 25%.
Can I compare tax savings too? Yes. The result estimates current-year federal income-tax reduction and recalculates QBI, because a deductible retirement contribution can also change the QBI deduction.
Why can a Solo 401(k) allow more than a SEP IRA?
A one-participant 401(k) lets the owner contribute in two capacities: employee and employer. The employee elective-deferral limit is $24,500 in 2026, while employer contributions for a self-employed owner use the special self-employed contribution calculation. A SEP IRA generally uses only the employer contribution side.
How is the owner-only SIMPLE IRA modeled?
For a SIMPLE plan sponsored by an employer with no more than 25 eligible employees, SECURE 2.0 makes the increased SIMPLE salary-reduction limit automatic. This owner-only calculator therefore uses the 2026 applicable-small-employer limit of $18,100, plus the applicable catch-up when age-eligible, and a standard 3% employer match. For a self-employed owner, SIMPLE compensation is based on Schedule SE net earnings before subtracting SIMPLE contributions.
This comparison does not model the alternative 2% nonelective formula, optional additional employer contributions, or the different rules that can apply to employers with 26–100 employees.
What are the 2026 limits?
The 2026 elective-deferral limit is $24,500. The defined-contribution annual-addition limit is $72,000 before catch-up contributions. The regular age-50+ catch-up is $8,000, and participants ages 60–63 have a higher $11,250 catch-up limit. SEP contributions are also subject to the $72,000 2026 maximum.
Why is the SEP rate 20% here instead of 25%?
For a self-employed owner, the contribution and the compensation used to calculate it depend on each other. IRS Publication 560 uses a reduced contribution rate. A plan contribution rate of 25% converts to a 20% self-employed rate, applied after the deductible part of self-employment tax.
Why does the QBI deduction change?
IRS QBI guidance treats deductions for qualified retirement-plan contributions attributable to the business as items that reduce QBI. The calculator therefore recalculates QBI instead of treating every retirement dollar as a full taxable-income reduction at your marginal bracket.
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