Two hats, one contribution total
A Solo 401(k) — the IRS calls it a one-participant 401(k) — covers a business owner with no full-time employees other than a spouse, and it follows the same rules as any other 401(k). The advantage for freelancers is that you wear two hats: you contribute as the employee through elective deferrals and again as the employer through profit-sharing, both from the same self-employment income. The calculator above adds the two buckets and applies the overall cap, so the default inputs ($80,000 compensation, $100,000 net income, age 35) produce $24,500 of employee deferral plus $20,000 of employer share for a $44,500 total (estimate; confirm current figures on irs.gov).
Bucket 1: the employee elective deferral
As the employee, you may defer up to 100% of compensation, capped at $24,500 for 2026 (2026 estimate — confirm on irs.gov). The compensation input on this page represents the earnings base your deferral is measured against; the deferral can never exceed what you actually earned. One trap for freelancers with a day job: the $24,500 employee limit is per person, not per plan, so deferrals to a second employer's 401(k) eat into the same cap. The deferral-limit field defaults to $24,500 but stays editable so you can model a lower plan-imposed ceiling or a future IRS adjustment.
Bucket 2: the employer profit-sharing share
As the employer, you may contribute up to 20% of net self-employment income for a sole proprietor (25% of W-2 wages if you are taxed as an S corporation). This calculator uses the simplified net × 0.20 formula: with $100,000 of net income the employer share is $20,000. The precise IRS math first adjusts net earnings by the self-employment tax deduction — roughly net × 0.9235 × 0.20, which turns $100,000 into about $18,470 — so treat the simplified figure as a planning estimate and let your tax software or accountant apply the exact adjustment at filing time. Select S corporation above to use 25% of owner W-2 wages instead of 20% of net. The IRS explains both capacities on its one-participant 401(k) plans page.
Bucket 3: catch-up contributions at age 50+
If you are age 50 or older at year-end, the plan may allow an extra $8,000 catch-up contribution for 2026 (2026 estimate — confirm on irs.gov), which raises both your deferral ceiling and the overall cap to $80,000. Try it on this page: set age to 55 with the defaults and the total rises by the $8,000 catch-up. Catch-up deferrals must be made before the end of the plan year, and under SECURE 2.0 higher earners may have to make them as Roth contributions — check your plan document.
2026 limits at a glance
| Limit | 2026 figure | Note |
|---|---|---|
| Employee elective deferral | $24,500 | 100% of compensation up to this cap; per person across all 401(k) plans |
| Catch-up at age 50+ | $8,000 | Extra deferral allowed at year-end age 50 or older |
| Catch-up at ages 60–63 | $11,250 | Higher catch-up for this age band |
| Employer profit share (sole proprietor) | 20% of net self-employment income | 25% of W-2 wages if taxed as an S corporation |
| Total annual additions | $72,000 before catch-ups | Employee plus employer combined cap |
Who can open one, rollovers, and deadlines
A Solo 401(k) covers a business owner with no full-time employees other than a spouse. The plan itself must exist by December 31 for employee deferrals to count for that tax year — open it late and the employee bucket is lost. Employer profit-sharing contributions can be made up until your tax-filing deadline (including extensions), once final profit is known. Rollover money from a prior employer plan or IRA can generally be moved into the Solo 401(k) where the plan document allows it; confirm the receiving rules in your plan document before moving funds.
Deadlines that actually matter
Two dates control everything. The plan itself must exist by December 31 for employee deferrals to count for that tax year — open it late and the employee bucket is lost. Employer profit-sharing contributions, by contrast, can be made up until your tax-filing deadline (including extensions), which gives you months after year-end to top up the employer share once final profit is known. Employee deferrals for the self-employed are generally due by the filing deadline too, but only if the plan was established in time — the December 31 setup deadline is the one freelancers miss most.
Go deeper
Run the estimate, then read the Solo 401(k) 2026 limits guide for the three-bucket breakdown, a full $100,000 worked example with the SE-tax adjustment, and the Roth vs traditional decision. Then use the tax set-aside calculator, the hourly rate calculator, and the contract rate converter to connect retirement saving with pricing and quarterly estimates.
Every figure above is hand-checked: the worked example was recomputed independently of the calculator code, and tax figures track 2026 IRS limits. How we check every page.