"In 2026, the employee contribution limit is $24,500. The employer profit-sharing layer allows up to 20% of net self-employment income for sole proprietors, or up to 25% of W-2 compensation for S-corp owners."
"An S-corp owner paying herself a $120,000 W-2 salary can contribute $24,500 as the employee and $30,000 as the employer, totaling $54,500."
"Owners aged 50 and older add a $8,000 catch-up contribution, bringing the potential total to $80,000. Under SECURE 2.0, owners aged 60 through 63 qualify for a 'super catch-up' contribution of $11,250."
Self-employed individuals can contribute to a Solo 401(k) as both employee and employer, significantly increasing their contribution limits. In 2026, the total contribution limit is $72,000, which includes a $24,500 employee deferral and an employer profit-sharing contribution based on income. Owners aged 50 and older can add catch-up contributions, raising the limit to $80,000, and those aged 60 to 63 can contribute up to $83,250. This dual-role structure allows for substantial retirement savings compared to traditional W-2 contributions.
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