Free tool
Solo 401(k) vs SEP IRA calculator
Your real contribution limits, side by side.
Your result is an estimate based on the answers you enter. It is not filed or stored anywhere.
Method
How this calculator works
Both accounts allow an "employer" contribution of roughly 20% of net self-employment earnings (after the half-SE-tax deduction). The solo 401(k) adds an employee deferral on top — $24,500 for 2026, plus an $8,000 catch-up at 50+ — which is why it usually wins at low and middle incomes, sometimes by tens of thousands of dollars.
Both are capped at the overall defined-contribution limit ($72,000 for 2026). At very high incomes the two converge; below roughly $250,000 of profit, the solo 401(k)'s deferral advantage dominates. Limits shown are for 2026 and update annually.
Estimates, not advice
Every figure this tool produces is a planning estimate built from the numbers you enter and simplified assumptions documented above. It is educational content, not individualized financial, legal, or tax advice. Rates, limits, and thresholds change — annual constants are reviewed each January, and you should confirm anything decision-critical against primary sources or a professional.
Questions
FAQ
Why does everyone say "20% not 25%"?
The statutory 25% applies to compensation after the contribution itself — for the self-employed the circular math works out to 20% of adjusted net earnings.
Any reason to pick the SEP anyway?
Setup simplicity and no annual filing. But note a solo 401(k) only requires Form 5500-EZ once assets pass $250,000, and offers Roth and loan options SEPs lack.
Deadlines?
SEP: fund by your filing deadline including extensions. Solo 401(k): the plan must exist earlier and deferral timing has rules — see the deadlines guide.