Many consultants, freelancers, real estate agents, physicians, attorneys, S-Corp owners, and side-business entrepreneurs ask the same question:
“Can I make only employer contributions to my Solo 401(k)?”
Watch: Learn if just the employer can make solo 401k contributions
The short answer: Yes — the IRS fully allows employer-only Solo 401(k) contributions.
But understanding when and why this strategy makes sense requires knowing the rules, contribution types, and tax mechanics.
This guide breaks down everything you need to know so you can use employer-only Solo 401(k) contributions strategically and compliantly — especially if you’re juggling self-employment plus a W-2 job, or maximizing overall contribution limits.
Solo 401(k) Eligibility: Who Can Make Employer Contributions?
Before contributing anything — employer or employee — you must qualify for a Solo 401(k). Eligibility requires:
Self-employment activity
You must have self-employment income from consulting, freelancing, real estate, a side business, or a full-time business.
Owner-only business
Your business cannot employ any non-owner W-2 employees working 1,000+ hours/year.
You can have:
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Contractors (1099)
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Part-time employees under 1,000 hours
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A spouse working in the business
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Multiple businesses, as long as no business in your control group employs full-time employees
If you meet these rules, you may contribute as employer, employee, or both.
Can the Employer Alone Contribute? Yes — and Here’s How It Works
A Solo 401(k) allows three types of contributions:
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Employee (salary deferral) – pre-tax or Roth
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Employer (profit sharing) – pre-tax OR Roth (Secure Act 2.0)
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Voluntary after-tax – used for Mega Backdoor Roth
You’re allowed to make only employer contributions if you wish.
Employer Contribution Basics
Employer contributions are always percentage-based, not dollar-based:
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S-Corp: 25% of W-2 wages
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Sole proprietor/Single-member LLC: 20% of net earnings
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Partnership: 20% of K-1 self-employment income
Example (S-Corp):
If you pay yourself $100,000 W-2, you can contribute:
25% × $100,000 = $25,000 employer contribution
Employer contributions are deductible on the business tax return, not your personal return.
Employer Contributions Now Allowed as Roth (NEW!)
Secure Act 2.0 allows employer contributions to be designated as Roth.
Key point:
A Roth employer contribution is:
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Deductible on the business tax return
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Taxable to you personally — treated like a Roth conversion
Because of this, many Solo 401(k) owners still prefer to use voluntary after-tax + Mega Backdoor Roth instead of Roth employer contributions.
When Employer-Only Contributions Make the Most Sense
1. You Already Maxed Your W-2 Job 401(k) Employee Contributions
Employee deferrals across all plans are aggregated.
If you max out $23,500 (2025) at your W-2 job, you cannot add employee deferrals to your Solo 401(k).
But employer contributions?
They’re NOT aggregated across plans.
So you can still contribute:
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25% of W-2 wages (S-Corp)
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20% of net earnings (sole prop/LLC)
Example:
Walmart job: full $23,500 employee deferral made
Side S-Corp: pay yourself $100,000 W-2
Solo 401(k) employer contribution allowed: $25,000
2. You Want a Simpler, Employer-Only Strategy
Many business owners prefer:
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No payroll changes
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No employee election forms
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A clean employer-only deduction on the business return
This is fully allowed.
3. You Want to Combine Employer Contributions + Mega Backdoor Roth
Even if you make employer contributions, you can still contribute voluntary after-tax up to the overall limit:
2025 Overall Solo 401(k) Limit:
$70,000 (under 50)
$81,250 (age 60–63 “super catch-up”)
Example:
Employer profit sharing: $25,000
Voluntary after-tax: $45,000
Total = $70,000
Then convert after-tax → Roth using Mega Backdoor Roth.
Employer Contribution Calculation by Business Type
S-Corporation
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25% of W-2 wages
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Reported on Form 1120-S, line 17
C-Corporation
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25% of W-2 wages
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Reported on Form 1120, line 23
Sole Proprietor
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20% of adjusted net earnings
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Reported on Schedule 1, Line 16 of Form 1040
Partnership
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20% of K-1 SE income
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Reported on:
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Schedule 1, Line 16, and
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K-1 Line 13, Code R
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You Can Mix and Match Contribution Types
A Solo 401(k) is the most flexible retirement plan available to self-employed individuals.
You can choose to make:
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Employer only
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Employee only
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Voluntary after-tax only
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Or any combination
Providers like MySolo401k Financial allow:
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Roth employer contributions
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Roth employee contributions
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Mega Backdoor Roth
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Alternative asset investing (real estate, crypto, notes)
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Brokerage accounts at Fidelity, Schwab, IBKR, etc.
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Participant loans
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Compliance support (1099-R, 5500-EZ, conversions, etc.)
Special Considerations
✔ Participate in a day-job 401(k)?
You can still make employer and after-tax contributions to your Solo 401(k).
Only employee deferrals are shared across plans.
✔ Employer Roth contributions are taxable
Even though deductible to the business.
✔ Mega Backdoor Roth often provides the largest Roth funding
Voluntary after-tax → immediate Roth conversion.
✔ Form 5500-EZ required once plan exceeds $250,000
MySolo401k Financial prepares this for clients.
Final Takeaways
✔ Yes — you can contribute employer-only to a Solo 401(k).
✔ Perfect if you already maxed your W-2 job 401(k).
✔ Employer contributions reduce your business taxable income.
✔ You can also layer in voluntary after-tax contributions for Mega Backdoor Roth.
✔ Flexibility is unmatched — you choose your mix of contribution types.
✔ Solo 401(k) remains the most powerful retirement vehicle for solopreneurs and side-business owners.
