Solo 401(k) Contribution Calculator
Free Solo 401(k) contribution calculator for 2026. Estimate employee deferrals, self-employed employer contributions, catch-up amounts, and the SEP IRA comparison.
SEP IRA Contribution Calculator
Calculate the maximum SEP IRA contribution for a self-employed individual using current federal limits and the self-employed deduction worksheet approach.
Schedule C net profit
$
Maximum SEP IRA Contribution (2026)
$37,177.00
Effective rate: 18.59% of net SE income
SE Tax (total)⧉
$28,234.00
15.3% of 92.35% of net income
SE Tax Deduction⧉
$14,117.00
Deductible half
Adjusted Net Earnings⧉
$185,883.00
Basis for 25% calculation
Estimated Tax Savings⧉
$8,922.00
At 24% marginal rate
Retirement Plan Comparison (2026)
| Plan | Max Contribution | Notes | |
|---|---|---|---|
| SEP IRA ← | $37,177.00 | 20% self-employed rate after SE-tax deduction | |
| Solo 401(k) | $61,677.00 | Employee deferral + 20% employer share | |
| SIMPLE IRA | $23,000.00 | Standard SIMPLE + 3% match | |
| Traditional/Roth IRA | $7,500.00 | $7,500.00 + no catch-up yet |
SEP Contribution by Income Level
| Net SE Income | Max SEP | Eff. Rate | At Cap? |
|---|---|---|---|
| $75,000.00 | $13,940.00 | 18.6% | No |
| $100,000.00 | $18,587.00 | 18.6% | No |
| $150,000.00 | $27,881.00 | 18.6% | No |
| $200,000.00 ← | $37,177.00 | 18.6% | No |
| $250,000.00 | $47,043.00 | 18.8% | No |
| $300,000.00 | $56,909.00 | 19% | No |
| $400,000.00 | $72,000.00 | 18% | Yes ($72,000.00) |
Uses 2026 federal limits and the self-employed deduction worksheet approach. Additional Medicare tax, W-2 wages from another job, and plan-design specifics can change the result.
Planning notes, formulas, and examples
About the SEP IRA Contribution Calculator
The SEP IRA Contribution Calculator estimates the maximum SEP IRA contribution for a self-employed individual. For sole proprietors and single-member LLC owners, the calculation is not simply 25% of profit. You first reduce net earnings by the deductible half of self-employment tax, and the effective self-employed contribution rate becomes 20% of those adjusted earnings.
SEP IRAs remain popular because they have high contribution limits and low administrative overhead compared with a full 401(k) plan. For 2026, the maximum SEP contribution is $72,000, subject to the compensation-based formula.
Enter net self-employment income to see the maximum SEP contribution, the effective contribution rate, and a rough comparison to IRA, SIMPLE IRA, and Solo 401(k) alternatives.
When This Page Helps
This page handles the self-employed math that people often get wrong. It shows the deductible half of self-employment tax, the adjusted earnings used in the formula, and the resulting SEP limit so you can plan contributions without overshooting the allowed amount.
How to Use the Inputs
- Enter your net self-employment income.
- The page calculates the deductible half of self-employment tax.
- Review your adjusted earnings and maximum SEP contribution.
- Check the effective contribution rate relative to gross net income.
- Use the comparison table for a rough view of how SEP stacks up against other retirement plans.
Formula used
Step 1: SE Tax Base = Net SE Income × 0.9235
Step 2: Deductible Half of SE Tax = (Social Security tax up to the annual wage base + Medicare tax on all SE tax base) ÷ 2
Step 3: Adjusted Net Earnings = Net SE Income − Deductible Half of SE Tax
Step 4: SEP Contribution = min(Adjusted Net Earnings × 20%, $72,000)Example Calculation
Result: Max SEP contribution: $37,177 (effective rate: 18.59%)
With $200,000 of net self-employment income, the SE tax base is reduced to 92.35% of profit and the deductible half of self-employment tax is subtracted first. That leaves about $185,883 of adjusted earnings. Applying the self-employed SEP rate of 20% produces a maximum contribution of about $37,177.
Tips & Best Practices
- For self-employed owners, the effective SEP rate is 20% of adjusted net earnings rather than 25% of raw profit.
- SEP contributions are generally deductible business retirement-plan contributions.
- SEP IRAs can often be funded up to the tax-filing deadline including extensions.
- SEP IRAs are pre-tax plans; this page does not model Roth SEP treatment.
- If you have eligible employees, employer contribution rules can become much more expensive than the solo case shown here.
- A Solo 401(k) often allows higher total contributions at lower income levels because it adds an employee deferral on top of the employer-style contribution.
Why SEP IRAs stay popular
SEP IRAs are still one of the simplest high-limit retirement plans for self-employed people. There is little administrative overhead, no annual Form 5500 requirement for a solo SEP, and contributions can usually be made up to the tax-filing deadline including extensions.
Why the rate is not 25% of profit
For self-employed owners, the plan-level 25% contribution rate has to be converted into the self-employed equivalent rate after backing out the deductible half of self-employment tax. That is why the effective formula lands at 20% of adjusted net earnings instead of a straight 25% of Schedule C profit.
When a Solo 401(k) can beat a SEP
At many income levels, a Solo 401(k) can allow a larger total because it adds an employee deferral before the employer-style contribution is calculated. The SEP remains attractive when simplicity is more important than squeezing out the last possible dollar of annual shelter.
Sources & Methodology
Last updated:
Methodology
This page calculates self-employment tax on 92.35% of net self-employment income, caps the Social Security portion at the 2026 contribution and benefit base, adds Medicare tax on the full self-employment tax base, and then subtracts half of that self-employment tax to get adjusted net earnings. It applies the self-employed SEP rate of 20% to those adjusted earnings and caps the result at the 2026 SEP dollar limit of $72,000.
The comparison rows for Solo 401(k), SIMPLE IRA, and regular IRAs are rough current-year planning comparisons, not full plan-design analyses. The page also does not model Additional Medicare Tax, other wages, multiple businesses, or employee-inclusion rules in detail.
Sources
- 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (Internal Revenue Service)
- Publication 560, Retirement Plans for Small Business (Internal Revenue Service)
- Social Security Announces 2.6 Percent Benefit Increase for 2026 (Social Security Administration) — Source for the 2026 contribution and benefit base.
Frequently Asked Questions
For 2026, the maximum SEP IRA contribution is $72,000. For self-employed individuals, the contribution is not a flat 25% of Schedule C profit. You first reduce earnings by the deductible half of self-employment tax, then apply the self-employed equivalent rate of 20%.
The 25% plan rate is applied at the employer-plan level, but a self-employed owner first has to reduce net earnings by the deductible half of self-employment tax. The IRS self-employed worksheets convert that into a 20% effective rate on adjusted net earnings.
A Solo 401(k) can allow higher contributions at many income levels because it combines an employee deferral with an employer-style contribution. For 2026, the standard employee deferral limit is $24,500 before catch-up contributions. SEP IRAs are simpler to administer, but they do not include that separate employee deferral piece.
Yes, but the contribution limits are separate only in the sense that the SEP contribution does not replace the regular IRA limit. Deductibility and other tax rules still depend on your overall tax situation.
SEP contributions can usually be made up to the tax-filing deadline including extensions. That flexibility is one reason the plan remains popular with self-employed owners.
No. It is a planning worksheet. It does not fully model Additional Medicare Tax, multiple jobs, multiple businesses, or every compensation definition issue that can matter on a real return.
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