How a Solo 401(k) limit is worked out
A Solo 401(k) has two parts. As the employee, you can defer up to $24,500 of pay in 2026, plus a catch-up from age 50. As the employer, the business can add profit sharing of up to 25% of pay. Together, leaving out the catch-up, they cannot pass $72,000 or 100% of your pay (IRC 415(c)).
For an S or C corporation, pay is your W-2 salary. For a sole proprietor or partner, pay is net earnings after half of self-employment tax and after the employer contribution itself, which works out to 20% of net earnings rather than 25%.
The salary deferral limit is per person, not per plan, and so is the catch-up. If you also defer into a 401(k), 403(b) or SIMPLE IRA at a job, tick the box for it and the calculator takes what you defer there off what you can defer here. The employer contribution is unaffected, because that limit applies to each business separately.
A job also changes self-employment tax. Social Security tax stops at $184,500 of combined pay in 2026, and wages from a job count first, so net earnings above what is left pay only the 2.9% Medicare part. Half of self-employment tax comes off the pay the plan counts, so a smaller tax leaves more room. See a W-2 job and a side business.