An elective deferral is the employee side of a 401(k): pay you elect to put into the plan, pre-tax or Roth. The limit for 2026 is $24,500 under IRC 402(g), plus a catch-up contribution from age 50. It is a personal limit shared across every 401(k) you take part in, including one at a day job. See a W-2 job and a side business.
A cash balance plan has no deferrals. All the money comes from the business. That is one reason owners often keep a Solo 401(k) alongside one: deferrals are left out of the combined deduction limit entirely, so the full deferral stays available however large the cash balance contribution.
Timing depends on the business. A sole proprietor or partner has to make the deferral election by December 31. In a plan's first year, a sole owner of an unincorporated business with no employees may elect as late as the tax return due date, without extensions. S and C corporation owners defer out of each paycheck, so the election has to come before the pay. See using a cash balance plan with a Solo 401(k).