The solo 401(k) contribution limit for 2026 is $72,000 in combined employee and employer contributions, built from a $24,500 employee elective deferral and an employer profit-sharing contribution of up to 25% of compensation.1Internal Revenue Service. IRS Notice 2025-67 Catch-up contributions sit on top of that ceiling for participants aged 50 and older, raising the absolute maximum to $80,000, or $83,250 for those aged 60 through 63. The plan treats you as both employee and employer of your own business, which is why there are two separate buckets to fill.
The Two Buckets
Every dollar you put in is either an employee elective deferral or an employer profit-sharing contribution. You make both decisions yourself. The employee side is a flat dollar amount of your compensation. The employer side is a percentage of that same compensation, contributed by the business on top of the deferral. Both count toward one overall annual limit.2Internal Revenue Service. Fixing Common Plan Mistakes – Failure to Limit Contributions for a Participant
What counts as “compensation” depends on your entity. S-corp and C-corp owners use the W-2 wages the corporation pays them.3Internal Revenue Service. Retirement Plan FAQs Regarding Contributions – S Corporation Sole proprietors and partners filing Schedule C use net earnings from self-employment, reduced by one-half of self-employment tax and by the employer contribution itself.4Internal Revenue Service. One-Participant 401(k) Plans That changes both the formula and the maximum you can actually put in.
Employee Deferral: $24,500
For 2026, the employee deferral is capped at $24,500 of your compensation.5Internal Revenue Service. Retirement Topics – Contributions You can split that between pre-tax and Roth in any proportion your plan document allows. The cap doesn’t depend on how profitable the business is, but your compensation must at least equal what you defer.
This limit is personal, not plan-specific. If you also participate in a 401(k) through a W-2 job, your deferrals across every plan combined still can’t exceed $24,500.5Internal Revenue Service. Retirement Topics – Contributions
Employer Profit-Sharing: Up to 25% of Compensation
The employer contribution is a percentage, not a dollar amount, and the percentage behaves differently depending on your entity.
S-Corp or C-Corp Owners
If the business pays you W-2 wages, the employer contribution can be up to 25% of those wages.4Internal Revenue Service. One-Participant 401(k) Plans Only the first $360,000 of compensation counts.6Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits At that ceiling, 25% would be $90,000, but the overall $72,000 combined cap kicks in long before that.
Sole Proprietors and Partnerships
For Schedule C filers, the effective employer rate is 20% of net adjusted self-employment income.7Internal Revenue Service. Publication 560 – Retirement Plans for Small Business It isn’t 25% because you have to back out one-half of self-employment tax and the contribution itself before applying the rate. The calculation:
- Start with net profit from Schedule C.
- Subtract one-half of self-employment tax.
- Subtract the employer contribution itself.
- Apply 25% to what remains, which simplifies algebraically to 20% of net earnings after the self-employment tax adjustment.
The $360,000 compensation cap applies here too.6Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits Employer contributions are discretionary, so you can put in anywhere from zero to the maximum in a given year.
The Combined $72,000 Ceiling
Employee deferral and employer profit-sharing combined cannot exceed $72,000 for 2026.1Internal Revenue Service. IRS Notice 2025-67 Catch-up contributions sit on top and don’t count against it.2Internal Revenue Service. Fixing Common Plan Mistakes – Failure to Limit Contributions for a Participant
Most solo 401(k) participants never reach $72,000, because their income runs out first. Take a sole proprietor with $150,000 in Schedule C net profit. After the self-employment tax deduction, net adjusted self-employment income is roughly $138,800. Twenty percent of that is about $27,750 on the employer side. Add the $24,500 deferral and the total comes to around $52,250. To max the full $72,000, you’d generally need net self-employment income above roughly $237,000.
Catch-Up Contributions by Age
Starting in 2026, three age brackets apply, each with a different catch-up amount.
Ages 50 Through 59, and 64 and Older
If you turn 50 by December 31 of the tax year, you can add $8,000 to the $24,500 deferral, bringing the employee side to $32,500.8Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026 The same $8,000 applies at 64 and older. Combined with the employer piece, the absolute maximum is $80,000.
Ages 60 Through 63: The Super Catch-Up
A SECURE 2.0 provision creates a higher catch-up for participants aged 60, 61, 62, or 63 during the tax year. For 2026 that enhanced amount is $11,250, which replaces the standard $8,000 rather than stacking on it.1Internal Revenue Service. IRS Notice 2025-67 The employee deferral maximum rises to $35,750 and the absolute combined limit to $83,250.
2026 Maximums at a Glance
- Under 50: $24,500 deferral plus employer contributions, $72,000 maximum.
- Ages 50–59 or 64+: $32,500 deferral plus employer contributions, $80,000 maximum.
- Ages 60–63: $35,750 deferral plus employer contributions, $83,250 maximum.
The Roth Catch-Up Rule Coming in 2027
For taxable years beginning after December 31, 2026, SECURE 2.0 requires catch-up contributions by participants who earned more than $145,000 in FICA wages the prior year to be designated as Roth.9Internal Revenue Service. Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions For calendar-year plans, 2027 is the first affected year. In 2026 you can still make catch-ups pre-tax at any income level, but your plan document needs to accommodate Roth catch-ups before 2027.
Including a Spouse
A solo 401(k) is restricted to owner-only businesses, but a spouse who works in the business counts as an eligible participant rather than a disqualifying employee. If your spouse earns legitimate W-2 wages from the business or receives self-employment income as a partner, they can make their own full employee deferrals and receive their own employer profit-sharing contributions. A working couple can effectively double the household’s totals, potentially sheltering well over $140,000 per year depending on ages and income.
If You Also Have a 401(k) at a W-2 Job
The two sides of the solo 401(k) interact with other plans differently.
Employee deferrals are shared. Your total deferrals to every 401(k), 403(b), and governmental 457(b) plan combined cannot exceed $24,500, or $32,500/$35,750 with the applicable catch-up.5Internal Revenue Service. Retirement Topics – Contributions If your W-2 employer’s plan takes $18,000 of deferrals, your solo 401(k) deferral is capped at $6,500.
Employer profit-sharing contributions are calculated separately for each unrelated business. What your W-2 employer contributes doesn’t affect what your solo 401(k) business can contribute on its employer side. Each business applies the $72,000 overall limit independently.
Blowing past the aggregated deferral limit creates an excess deferral. You need to withdraw the excess plus any earnings by your tax filing deadline for the year of the over-contribution. Miss that and the IRS taxes the excess in the year you contributed it, and again when you take a distribution.10Internal Revenue Service. Consequences to a Participant Who Makes Excess Annual Salary Deferrals Tracking deferrals across plans is on you.
When Contributions Have To Land
One deadline is firm: your plan document must be formally adopted by December 31 of the year you want to start contributing. You can’t retroactively establish a solo 401(k) after the year closes.
After that, timing is forgiving. For self-employed individuals, both the employee deferral and the employer contribution can be deposited as late as the business’s tax filing deadline, including extensions.4Internal Revenue Service. One-Participant 401(k) Plans A sole proprietor filing Form 1040 with Schedule C generally has until April 15, or October 15 with an extension.11Internal Revenue Service. FAQ – Due Date for Business Income Tax Returns An S-corp filing Form 1120-S has a March 15 deadline, extendable to September 15. The first-year catch is that you must make a written salary deferral election before the business’s year end.
That window lets you finalize your net income, calculate the optimal split, and deposit everything in a single transaction months into the following year. The contribution is reported on the tax return for the year it applies to, not the year the deposit clears.