SEP-IRA vs Solo 401(k) Calculator

SEP-IRA or Solo 401(k): how much more can you save in 2026?

For a sole proprietor or single-member LLC. A SEP-IRA is employer money only — 20% of net earnings, no catch-up. A Solo 401(k) adds an employee deferral of up to $24,500 (more with a catch-up), so it allows more at almost every income. This shows how much more, what it is worth in tax, and the profit each plan needs to reach the $72,000 ceiling.

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1. Your business and age

Net profit from your business in 2026 ($)

Your age at the end of 2026

Your marginal tax rate (%), optional

Deferred to another 401(k) this year ($), optional

Net profit is your Schedule C net profit before this contribution — not gross revenue.

Enter your net profit and age, then click Compare.

What this does not cover

Sole proprietor / single-member LLC with no employees only. A SEP-IRA must cover eligible employees at the same percentage as the owner, and a Solo 401(k) is only available while you have no employees other than a spouse. S-corps and partnerships use W-2 wages or a K-1 allocation.
Contribution room, not investment or plan terms. Fees, Roth options, loans, investment choices, plan documents and the deadlines to open each plan are not modelled; confirm them with the provider.
The tax figure is an estimate. It multiplies the extra deduction by the single marginal rate you enter; it ignores phase-outs, the QBI deduction interaction and state rules.
Point-in-time 2026 figures. These limits are re-indexed annually; confirm the current year's figures before relying on this in a later year.

Common questions

SEP-IRA or Solo 401(k): which lets a self-employed person save more in 2026?

The Solo 401(k), at every income level. A SEP-IRA is employer money only: 20% of net self-employment earnings, up to $72,000, with no catch-up. A Solo 401(k) adds an employee deferral of up to $24,500 ($32,500 at 50, $35,750 at 60-63) on top of the same 20% employer share, so the gap is largest at low and middle profits and closes only when both plans reach the $72,000 ceiling.

At what income does a SEP-IRA stop being worse than a Solo 401(k)?

Only at very high profit. Because the SEP-IRA contributes just 20% of net earnings, it needs roughly $376,000 of net profit to reach $72,000, while a Solo 401(k) reaches the same ceiling at roughly $252,000 (younger than 50). Below that the Solo 401(k) always allows more, though a SEP-IRA is simpler to set up and run.

Does a day-job 401(k) deferral affect a SEP-IRA?

No. The elective-deferral limit is shared across every 401(k) you contribute to, so deferrals at a W-2 job reduce your Solo 401(k) room. A SEP-IRA is an employer contribution and is not reduced by them, which can make it the better fit when a day job already uses most of your deferral limit.

Do I get a catch-up contribution with a SEP-IRA?

No. Catch-up contributions apply to an elective deferral, and a SEP-IRA has none. At 50 or older a Solo 401(k) adds $8,000 ($11,250 at ages 60-63 if the plan allows it) that a SEP-IRA cannot.

Is this tax advice?

No. This tool applies published 2026 IRS figures to the numbers you enter, scoped to a sole proprietor or single-member LLC with no employees. It does not replace IRS Publication 560 or a qualified tax professional.