Solo 401(k) Maximum Contribution Calculator

The Solo 401(k) Maximum Contribution Calculator helps self-employed individuals and small business owners determine their maximum contributions to a Solo 401(k) plan, including Roth contributions and employer contributions. By inputting key details like your adjusted net earnings and other retirement contributions, this tool calculates how much you can contribute while adhering to IRS limits. Whether you’re planning your retirement savings or maximizing tax advantages, this calculator provides a clear and straightforward breakdown of your options.

How to Use Solo 401(k) Maximum Contribution Calculator:

• Pre-tax Solo 401(k) Contribution: Enter the amount you wish to contribute to your Solo 401(k) on a pre-tax basis. The default value is $5,000.
• After-tax Solo Roth 401(k) Contribution: Enter the amount you wish to contribute to your Solo Roth 401(k). The default value is $5,000.
• Annual IRS Employee Contribution Limit: For 2024, the maximum employee contribution limit is $23,500 (or $30,500 if you’re 50 or older, which includes a $7,500 catch-up contribution). Adjust this number if needed.
• Other Total Defined Contribution Plan Contributions: If you contribute to other retirement plans, such as a 401(k) or 403(b), enter the total contributions here. The default value is $0.
• Total Earnings: Enter your total self-employment earnings (before taxes). The calculator will automatically compute your Adjusted Net Earnings by subtracting half of your self-employment tax. The default value is $100,000.
• Self-employment Tax Rate: Enter your self-employment tax rate as a percentage (default is 15.3%). The calculator uses this rate to compute Adjusted Net Earnings for employer contribution calculations.
• Other Self-employment Retirement Plan Contributions: If you’re contributing to another self-employment retirement plan, such as a SEP IRA, enter the total contributions here. The default value is $0.

Important Notes:

• Employee Contribution Limits: Your employee contribution is shared across all 401(k) and 403(b) plans. Ensure your total contributions do not exceed the annual IRS employee limit of $23,500 (or $31,000 if you’re 50 or older).
• Employer Contribution Limits: Your employer contribution is calculated as 20% of Adjusted Net Earnings and is further capped by the IRS limits. The total combined contribution (employee + employer) cannot exceed:
  • The lesser of $70,000 for 2024 (or $77,500 if aged 50 or older, including catch-up contributions), or
  • 100% of your Adjusted Net Earnings.
• Adjusted Net Earnings Calculation: The calculator determines Adjusted Net Earnings as your total self-employment earnings minus half of your self-employment tax. This value is used to compute the maximum employer contribution.
• IRS Contribution Guidelines: Contributions to pre-tax Solo 401(k) and after-tax Solo Roth 401(k) are included in the employee contribution limit.
  • The calculator ensures compliance with the IRS limits and warns if contributions exceed:
  • The IRS employee contribution limit (e.g., $23,500).
  • • Your total earnings.
• Catch-up Contributions: If you’re 50 or older, catch-up contributions of $7,500 for 2025 are not automatically included in this calculator. Adjust the employee contribution limit manually if applicable.
• Employer Contribution Adjustment: The employer contribution cannot exceed:
  • 20% of Adjusted Net Earnings:
    • The amount left after employee contributions, or
  • The IRS-defined maximum total contribution limit.

Example:

If your Total Earnings are $100,000:

• Adjusted Net Earnings: $92,350 (after subtracting half of the 15.3% self-employment tax).
• Maximum Employer Contribution: $18,470 (20% of Adjusted Net Earnings).
• Combined Contribution Limit: The lesser of $70,000 or 100% of Adjusted Net Earnings.

The calculator provides clear warnings if contributions exceed these limits.

NOTE:

The most common mistake is misunderstanding that the employer contribution amount in Solo 401(k) contribution limit is up to 20% of adjusted net earnings, not 25% as stated in the usual IRS instructions. This is because, in the IRS instructions, adjusted net earnings must first subtract the employer contribution before applying the 25%. When solved algebraically, this results in a 20% effective rate instead of 25%.

As always, check the IRS guidelines first and use this calculator as a helper. See this article for more details including the 25% vs. 20% confusion.