Updated
Short answer: On $100,000 of sole-proprietor net profit, under age 50, a $24,500 deferral plus a 20% employer share is $43,087.04. W-2 and S-corp wages still use 25% of compensation. The $72,000 annual-additions cap and the $360,000 compensation cap still apply.
Deferral $24,500.00. Catch-up $0.00. Employer $18,587.04 (20% of net self-employment earnings $92,935.22). Total $43,087.04. Annual additions excluding catch-up $43,087.04 (cap $72,000).
| Step | Amount |
|---|---|
| Net profit | $100,000.00 |
| W-2 Social Security wages already taxed | $0.00 |
| 92.35% net earnings | $92,350.00 |
| Schedule SE tax | $14,129.55 |
| Half of SE tax | $7,064.78 |
| Net SE earnings | $92,935.22 |
| Compensation used (cap $360,000) | $92,935.22 |
| Employer rate (25% ÷ 1.25) | 20% |
| Employer contribution | $18,587.04 |
| Elective deferral | $24,500.00 |
| Catch-up | $0.00 |
| Total | $43,087.04 |
IRS source, checked 2026-10-11. IRS Publication 560 divides a sole proprietor's plan percent by one plus that percent, then applies that owner rate to net earnings after half of the self-employment tax.
2026 elective deferral limit is $24,500. Catch-up is $8,000 at age 50, or $11,250 at ages 60, 61, 62, and 63. Annual additions (deferrals other than catch-up, plus employer contributions) cannot exceed the lesser of compensation or $72,000. Compensation counted is capped at $360,000. Catch-up is allowed on top of the $72,000. The sole-proprietor sketch uses the W-2 Social Security wages field, default $0, against the $184,500 wage base. In W-2 / S-corp mode that field is ignored because the wages are typed in the compensation box.
Sources, checked 11 Oct 2026: IRS Publication 560, IRS 2026 401(k) limit announcement, and IRS 401(k) contribution limits. Planning only. This is not tax advice.
SEP-IRA · HSA contribution · Self-employment tax · Price your work to cover this
| Net profit | Total contribution |
|---|---|
| $25,000 | $23,233.80 |
| $50,000 | $33,793.52 |
| $100,000 | $43,087.04 |
| $200,000 | $61,676.57 |
| $400,000 | $72,000.00 |
Elective deferrals are $24,500. The age-50 catch-up is $8,000. Ages 60 to 63 can use a $11,250 catch-up instead. Annual additions excluding catch-up cannot exceed $72,000. Compensation counted is capped at $360,000.
No. The default is a sole proprietor. IRS Publication 560 divides the plan percent by one plus that percent, so 25% becomes 20% of net self-employment earnings (net profit minus half of the self-employment tax). On $100,000 the employer share is $18,587.04, and with a $24,500 deferral the total is $43,087.04. W-2 and S-corp wages use the plan percent itself, up to 25% of compensation. The employer share also stops at the room left under the $72,000 annual-additions limit after the elective deferral. Catch-up is added only after that $24,500 limit is filled, and it sits on top of the $72,000. Ages 60 to 63 add $11,250, so $200,000 of sole-proprietor net profit totals $72,926.57. Deferrals already made at another job reduce the $24,500 room: $10,000 already deferred on $100,000 leaves $33,087.04 here. Elective deferrals, catch-up, and the employer share together cannot exceed pay.