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Solo 401(k) Contribution Limits for 2026

2026 Solo 401(k) limits: $24,500 deferral, $8,000 catch-up ($11,250 at ages 60-63), 25% employer contribution, $72,000 total. S-Corp example inside.

As of 2026-09-24 · By Alpha Kamara

Short answer: For 2026, you can defer up to $24,500 into a Solo 401(k) as the employee. On top of that, the business can add an employer contribution of up to 25% of your W-2 pay (S-Corp) or about 20% of net self-employment earnings (sole proprietor). Together those can't exceed $72,000. Catch-ups add $8,000 at age 50+, or $11,250 at ages 60-63.

A Solo 401(k) (the IRS calls it a "one-participant 401(k) plan") covers a business owner with no employees, or the owner and their spouse. You put money in two ways: as the employee and as the employer. Each has its own limit, and both count toward one overall cap. All 2026 figures below come from IRS News Release IR-2025-111 and IRS Notice 2025-67 (links in Sources).

2026 Solo 401(k) limits at a glance

Limit (2026) Amount IRS source
Employee elective deferral (IRC 402(g)(1)) $24,500 (up from $23,500 in 2025) IR-2025-111; Notice 2025-67
Catch-up, age 50+ (IRC 414(v)(2)(B)(i)) $8,000 (up from $7,500) IR-2025-111; Notice 2025-67
Higher catch-up, ages 60-63 (IRC 414(v)(2)(E)(i)) $11,250 (instead of $8,000; unchanged from 2025) IR-2025-111; Notice 2025-67
Total annual additions (IRC 415(c)(1)(A)) $72,000 (up from $70,000), not counting catch-ups Notice 2025-67; IRS COLA table
Maximum compensation that can be counted (IRC 401(a)(17)) $360,000 (up from $350,000) Notice 2025-67
Roth catch-up wage threshold (2025 FICA wages, applied to 2026 catch-ups) $150,000 (up from $145,000) Notice 2025-67

Adding those up, the most one person can put into a Solo 401(k) for 2026 is $72,000 under age 50, $80,000 at ages 50-59 or 64+ ($72,000 + $8,000), and $83,250 at ages 60-63 ($72,000 + $11,250). That assumes your compensation is high enough to support it.

The 2026 employee deferral limit: $24,500

As the employee, you can defer up to 100% of your compensation, capped at $24,500 for 2026. For an S-Corp owner, compensation means your W-2 wages from the S-Corp. For a sole proprietor, it means earned income (explained below). You can make deferrals pre-tax, or as designated Roth contributions if your plan allows them.

The $24,500 limit is per person, not per plan. If you also defer into a 401(k) at a W-2 job in 2026, your deferrals across both plans together can't go over $24,500 (plus any catch-up you qualify for). The IRS points this out on its one-participant 401(k) page.

Age 50+ catch-up: $8,000

If you are 50 or older by the end of 2026, you can defer an extra $8,000 on top of the $24,500, for $32,500 in employee deferrals. Catch-up contributions don't count toward the $72,000 total additions limit.

Roth catch-up rule for higher earners (SECURE 2.0): Notice 2025-67 says that if your 2025 FICA wages from the employer sponsoring the plan were more than $150,000, your 2026 catch-up contributions must be made as Roth contributions. That matters for S-Corp owners who pay themselves a high salary. If your plan doesn't offer a Roth option, ask your provider whether you can make catch-ups at all. Sole proprietors don't receive FICA wages, so talk with your CPA about how this rule applies to you.

SECURE 2.0 higher catch-up for ages 60-63: $11,250

SECURE 2.0 created a bigger catch-up for participants who turn 60, 61, 62, or 63 during the calendar year. For 2026 it stays at $11,250, and it replaces the $8,000 catch-up rather than adding to it. At ages 60-63, you can defer up to $35,750 as the employee ($24,500 + $11,250). The year you turn 64, you drop back to the standard age-50+ catch-up.

The employer contribution

The business can also make an employer (nonelective or "profit-sharing") contribution for you. How it's calculated depends on how your business is taxed.

Owner-only S-Corp: up to 25% of W-2 wages

The IRS says the employer contribution can be up to 25% of compensation as defined by the plan. For an S-Corp owner-employee, that's your W-2 wages from the S-Corp. S-Corp distributions don't count, so only the salary paid through payroll supports a contribution. Plans generally include your pre-tax deferrals in that compensation, but check your plan document. The compensation counted is capped at $360,000 for 2026.

Employer contributions aren't wages, so they don't reduce your paycheck and aren't subject to Social Security or Medicare tax. Pre-tax employee deferrals still are.

Sole proprietor or single-member LLC: the net self-employment earnings rule

If you're self-employed (Schedule C, or a single-member LLC not taxed as a corporation), you have to do a special calculation. The IRS defines your compensation as "earned income": net earnings from self-employment minus (1) the deductible half of your self-employment tax and (2) your own contributions. Since your contribution and your compensation depend on each other, the IRS has you use a reduced rate instead. A 25% plan rate works out to 25% ÷ 125% = 20% of net self-employment earnings after subtracting half of SE tax. The rate table and worksheets are in Chapter 5 of IRS Publication 560.

Self-employed owners deduct their own plan contributions on Form 1040, Schedule 1, not on Schedule C.

The total annual additions limit: $72,000

Your employee deferrals plus employer contributions can't go over the lesser of $72,000 or 100% of your compensation for 2026. Catch-ups are the exception: they're allowed on top of $72,000. This is why S-Corp salary matters. If your salary is low, the 25% employer contribution is small, and your total may land well under $72,000.

Worked example: owner-only S-Corp (illustrative)

Illustrative only. This is a simplified, hypothetical example to show how the 2026 limits work together. It is not a recommendation for what salary to pay yourself or how much to contribute. Your reasonable compensation has to be supported by the work you actually do, not picked to hit a retirement target. Confirm your numbers with your CPA and plan provider.

Facts (hypothetical): Jordan is a 45-year-old consultant who operates through a single-owner S-Corp with no employees. The S-Corp pays Jordan a reasonable W-2 salary of $100,000 in 2026, and the plan defines compensation as W-2 wages including deferrals.

Step Calculation Amount
1. Employee deferral Lesser of $24,500 or 100% of $100,000 $24,500
2. Employer contribution 25% × $100,000 $25,000
3. Subtotal toward the $72,000 limit $24,500 + $25,000 $49,500
4. Check against the total annual additions limit $49,500 ≤ lesser of $72,000 or $100,000 OK
Total 2026 contribution $49,500

Same facts, but Jordan is 61 in 2026: Jordan can add the $11,250 age 60-63 catch-up, for a total of $60,750 ($24,500 + $11,250 + $25,000). Jordan's 2025 FICA wages were $150,000 or less, so the Roth catch-up requirement doesn't apply.

What salary gets to $72,000 without catch-ups? The deferral fills $24,500. The other $47,500 would need to come from the 25% employer contribution, which takes $190,000 of W-2 wages ($47,500 ÷ 25%). A higher salary also means more payroll tax, so whether that's worth it depends on your whole tax picture. Only pay a salary you can defend as reasonable compensation.

Deadlines for the 2026 plan year

  • S-Corp employee deferrals: These come out of W-2 wages paid during 2026. The plan has to be in place, and your deferral election made, before the payroll that withholds them. You can't make an S-Corp deferral for 2026 after the last 2026 payroll.
  • Depositing withheld deferrals: Deposit each deferral as soon as you reasonably can after payday. See the payroll section below.
  • Employer contributions: Due by the employer's tax return filing deadline, including extensions. For a calendar-year S-Corp filing Form 1120-S, that's generally March 15, 2027, or September 15, 2027 if extended.
  • Sole proprietors: Contributions can be made up to the due date of your return plus extensions. Under SECURE 2.0, a sole proprietor with no employees can adopt a new 401(k) plan after year-end if it's adopted by the tax filing deadline without extensions (generally April 15, 2027 for 2026). First-year deferrals then have to be paid to the plan before that unextended deadline (IRS Publication 560).
  • Form 5500-EZ: You have to file it if plan assets were $250,000 or more at the end of the plan year. It's due by the last day of the seventh month after the plan year ends (July 31 for a calendar-year plan). The IRS also says to file one for the final plan year when you close the plan.

Common mistakes

  1. Counting S-Corp distributions as compensation. Only W-2 wages support deferrals and the 25% employer contribution.
  2. Going over the per-person deferral limit. Deferrals to a W-2 job's 401(k) plus your Solo 401(k) together can't top $24,500 (plus any catch-up).
  3. Using 25% of Schedule C profit as a sole proprietor. The effective rate is about 20% of net SE earnings after subtracting half of SE tax, per the IRS worksheet.
  4. Deducting a sole proprietor's own contribution on Schedule C. It belongs on Form 1040, Schedule 1.
  5. Making S-Corp "deferrals" outside payroll. A deferral that never shows up on your W-2 is hard to defend as an elective deferral.
  6. Depositing withheld deferrals late, which can cause an operational failure or a prohibited transaction.
  7. Missing the age 60-63 window or the Roth catch-up rule. The higher catch-up only applies in the years you turn 60-63. High earners' catch-ups may have to be Roth.
  8. Hiring an employee without revisiting the plan. Once you have eligible employees, the plan isn't a one-participant plan anymore, and coverage and nondiscrimination rules apply.
  9. Forgetting Form 5500-EZ once assets reach $250,000.

How it works with payroll: remitting deferrals on payday

For an S-Corp owner, employee deferrals should run through payroll like any other employee's 401(k) deferral:

  1. Make a written deferral election before the pay periods it covers (for example, a fixed dollar amount or percentage per paycheck).
  2. Set up the deferral in your payroll system as a pre-tax 401(k) or Roth 401(k) deduction. Pre-tax deferrals lower federal income tax wages (W-2 Box 1). They don't lower Social Security or Medicare wages (Boxes 3 and 5). Deferrals are reported in Box 12 (code D for pre-tax 401(k), code AA for Roth 401(k)).
  3. Send the money to the plan on payday, or as close to it as you can. The IRS 401(k) Fix-It Guide says Department of Labor rules require deferrals to be deposited as soon as the employer can reasonably separate them from business assets, and never later than the 15th business day of the following month. The IRS notes that the 15th business day is a maximum, not a safe harbor. It also describes a 7-business-day safe harbor for plans with fewer than 100 participants. In an owner-only business, it's usually easiest to send the deferral from the business account to the plan the same day payroll runs.
  4. Keep the employer contribution separate. It isn't withheld from pay. The S-Corp can deposit it during the year or by its tax filing deadline (including extensions), and it's deducted on the S-Corp return.
  5. Reconcile at year-end. Make sure Box 12 on your W-2, your payroll records, and your plan deposits all match.

Frequently asked questions

What is the Solo 401(k) contribution limit for 2026?

For 2026, the combined employee and employer limit is $72,000 (the IRC 415(c) total annual additions limit), or 100% of your compensation if that's less. Of that, up to $24,500 can be employee elective deferrals. Catch-up contributions go on top: $8,000 at age 50+, or $11,250 at ages 60-63. Source: IRS Notice 2025-67.

How much is the 2026 catch-up contribution for people 50 and older?

The standard 2026 catch-up for participants age 50 and older is $8,000, up from $7,500 in 2025. With it, a 50+ participant can defer up to $32,500 as the employee. Catch-ups don't count toward the $72,000 total annual additions limit.

Who qualifies for the $11,250 catch-up in 2026?

Under SECURE 2.0, participants who turn 60, 61, 62, or 63 during 2026 get a higher catch-up limit of $11,250 instead of $8,000. It replaces the standard catch-up; you can't take both. At 64 you go back to the standard age-50+ catch-up.

How much can an owner-only S-Corp contribute as the employer?

The S-Corp can make an employer contribution of up to 25% of your W-2 compensation as defined by the plan, with compensation capped at $360,000 for 2026. S-Corp distributions don't count. Your employee deferrals plus the employer contribution can't go over $72,000, not counting catch-ups.

How is the employer contribution calculated for a sole proprietor?

A sole proprietor has to use the IRS self-employed calculation. Compensation is net earnings from self-employment minus the deductible half of self-employment tax and minus your own contribution. A 25% plan rate works out to an effective 20% of net self-employment earnings after subtracting half of SE tax. The IRS worksheets are in Publication 560.

Can I contribute to a Solo 401(k) if I also have a 401(k) at a W-2 job?

Yes, but the $24,500 employee deferral limit is per person, not per plan. Your deferrals to both plans together can't go over $24,500 for 2026, plus any catch-up you qualify for. Employer contributions to your Solo 401(k) are figured separately. Have your CPA confirm the overall limits for your situation.

Do my 2026 catch-up contributions have to be Roth?

They do if your 2025 FICA wages from the employer sponsoring the plan were more than $150,000. IRS Notice 2025-67 says those participants' 2026 catch-ups must be designated as Roth contributions. S-Corp owners paying themselves a high salary should check this and make sure their plan offers Roth contributions.

What is the deadline for 2026 Solo 401(k) employer contributions?

Employer contributions are due by the business's tax return filing deadline, including extensions. For a calendar-year S-Corp, that's generally March 15, 2027, or September 15, 2027 if extended. S-Corp employee deferrals are different: they have to come out of W-2 wages paid during 2026.

Estimate your own 2026 contribution

Want to see what these limits mean for your salary, entity type, and age? Try the free IndieVaults tax savings calculator. It compares S-Corp, Solo 401(k), and SEP-IRA strategies. Or book a free tax analysis, and we'll go through the numbers with your existing accountant. You can also reach us at hello@indievaults.com or (773) 617-5359.

Sources

Disclaimer

This guide is for general educational purposes only and is not tax, legal, or investment advice. The worked example is hypothetical and illustrative. Contribution limits are the 2026 figures published by the IRS as of the date modified above, and rules can change. Your own limits depend on your compensation, entity type, plan document, and any other plans you take part in. Before you contribute, set a salary, or file, check with your CPA or tax advisor and your plan provider. IndieVaults works alongside your existing accountant and doesn't replace one.

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