SEP IRA vs Solo 401(k) Calculator United States
Use this SEP IRA solo 401k calculator to compare the most you can put in each for 2026 from net self-employment income, after the half-SE-tax adjustment.
What it does
The SEP IRA vs Solo 401(k) Calculator works out the maximum 2026 retirement contribution a self-employed person can make under each plan, starting from net self-employment income after the one-half self-employment-tax adjustment. A Solo 401(k) adds an employee salary deferral on top of the same employer contribution, up to the overall defined-contribution limit.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| Social Security (OASDI) rate | 0.062 | irs.gov | Effective 2026-01-01Made open-ended (was valid to 2026-12-31): the 6.2% OASDI rate is fixed by statute (IRC 3101(a)/3111(a)); unchanged for 2027. audit 2026-09-23 |
| Medicare rate | 0.0145 | irs.gov | Effective 2026-01-01Made open-ended (was valid to 2026-12-31): the 1.45% HI rate is fixed by statute (IRC 3101(b)(1)/3111(b)); unchanged for 2027. audit 2026-09-23 |
| Social Security (OASDI) contribution and benefit base, 2026 | 184,500 | federalregister.gov, ssa.gov | Effective 2026-01-01Auto-update: replaced dead source link |
| Elective deferral limit (IRC 402(g)(1)); the same dollar amount applies by statute to 403(b) deferrals and to 457(b) deferrals under IRC 457(e)(15) | 24,500 | irs.gov | Effective 2026-01-01 |
| Annual additions limit for a defined contribution plan (IRC 415(c)(1)(A)) | 72,000 | irs.gov | Effective 2026-01-01 |
| Catch-up contribution limit for ages 50 and over, applicable employer plans other than SIMPLE (IRC 414(v)(2)(B)(i)) | 8,000 | irs.gov | Effective 2026-01-01 |
| SEP employer contribution rate | 0.25 | irs.gov | Effective 2026-01-01Dead source link replaced with live official URL |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Adjusted earnings = net income − ½ SE tax; employer = 20% of adjusted earnings; SEP total = min(employer, 415(c) limit); Solo total = min(deferral + catch-up + employer, 415(c) limit + catch-up)
How it works
It reduces your net self-employment income by half of your self-employment tax to find adjusted net earnings, takes 20% of that as the employer contribution, and for a Solo 401(k) adds the employee deferral (plus any age-50 catch-up). The total is capped at the overall 415(c) limit, raised by the catch-up when you are 50 or older.
Where it is used
- Comparing how much more a Solo 401(k) lets you save versus a SEP-IRA
- Sizing a self-employed retirement contribution before the tax-filing deadline
- Checking whether the age-50 catch-up lifts you toward the overall limit
Worked example
On $100,000.00 of net self-employment income under a Solo 401(k), the maximum contribution is … — … of employee deferral plus … of employer contribution — well below the overall limit, so the extra deferral is what a SEP-IRA cannot match.
Freelancers, contractors and single-member LLC owners often choose between a SEP-IRA and a Solo 401(k). Both are simple to open and both shelter income from tax, but at the same profit they allow different contributions. This calculator takes your net self-employment income, applies the 2026 limits, and shows the most you could put away under each plan, split between the employer contribution and, for a Solo 401(k), the employee deferral.
How the contribution is built
Part of your profit goes to self-employment tax, so the calculator first reduces your net self-employment income by one-half of that tax to get adjusted net earnings. Both plans base the employer contribution on this figure.
Under a SEP-IRA, the only contribution is the employer contribution, 20% of adjusted net earnings. Under a Solo 401(k), you make the same 20% employer contribution plus an employee salary deferral. The deferral is a flat dollar amount, not a percentage, which is why the Solo 401(k) allows more, especially at modest incomes.
The employee deferral
For 2026 the Solo 401(k) deferral limit is $24,500, added on top of the employer contribution. The SEP-IRA is limited to the 20% employer piece, so at a moderate profit the Solo 401(k) total can be far larger.
The gap is widest when profit is too low for the 20% employer contribution to be large. At $100,000 of net income the employer contribution is under $19,000, and the Solo 401(k) adds the full $24,500 deferral, more than doubling the total. Only at very high incomes, where the employer contribution alone approaches the overall limit, does the difference narrow.
The overall limit and the catch-up
The overall defined-contribution limit, known as the 415(c) limit, is $72,000 for 2026. Neither the SEP-IRA employer contribution nor the Solo 401(k) total may exceed it, so once your contributions reach that figure, more profit does not raise the amount you can put in.
Savers aged 50 and older can add an $8,000 catch-up, which raises the Solo 401(k) deferral and lifts the overall ceiling by the same amount. The catch-up does not apply to a SEP-IRA, which stays at the base limit regardless of age.
A worked example
Suppose your net self-employment income is $100,000 and you are under 50. After subtracting one-half of your self-employment tax, adjusted net earnings are roughly $92,935. The employer contribution is 20% of that, about $18,587, which is the whole SEP-IRA maximum. A Solo 401(k) adds the $24,500 deferral, for a total of about $43,087, still well below the overall limit and more than twice the SEP-IRA amount.
Assumptions and limitations
This is an estimate for planning, not tax advice. It uses the 2026 self-employment-tax rates and retirement contribution limits, stored as parameters taken from the IRS and reviewed each year. It assumes the figure you enter is net self-employment income after deductible business expenses, and that no other retirement plan is using the same deferral limit. It does not model contributions through W-2 wages elsewhere, a spouse's plan, Roth versus traditional treatment, or state tax. For anything beyond a planning estimate, check current IRS guidance or ask a tax professional.
About This SEP IRA Solo 401k Calculator
Use this SEP IRA Solo 401k calculator to get an instant, accurate estimate. The figures follow official IRS guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Tax year 2026
Frequently asked questions
What is the difference between a SEP-IRA and a Solo 401(k)?
How much can I contribute to a Solo 401(k) in 2026?
Why is the employer contribution only 20% and not 25%?
Does the age-50 catch-up apply to a SEP-IRA?
What income figure should I enter?
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