Guideline makes saving for retirement a breeze. Our Solo 401(k) has you covered with end-to-end compliance, admin, and required IRS filings.
Based on the number of active accounts with Gusto as of July 2025
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Probably. Any business is eligible to open a Solo 401(k) plan, provided only owners, partners, or spouses will be eligible to participate in the plan.
While a business sponsoring a Solo 401(k) can have common-law employees, they must not be eligible for the plan based on the eligibility requirements in the plan document. Allowable eligibility requirements will be discussed here. Note that non-owners cannot be excluded as a class.
It is also important to note that if you are part of a controlled or affiliated service group, you are not able to open a Solo 401(k) plan at Guideline.
A solo 401(k) is identical to a standard 401(k) in most ways, including the combined employee and employer contribution limit. At Guideline, solo 401(k) and standard 401(k) plans enjoy all the same features, including direct payroll integrations, automated compliance and admin, a mobile app for tracking.
The main differences come in who is eligible.
A Solo 401(k) plan is limited to owners and their spouses, and cannot include common-law employees. A Solo 401(k) plan also allows owners to make contributions as both employee and employer. A Solo 401(k) is ideal for owner-only (or owner plus spouse) businesses that don’t have non-owner common-law employees.
A standard 401(k), on the other hand, is open to all eligible employees. Employees can only make contributions out of their paycheck, and employers can choose whether or not to provide contributions to their employees’ 401(k) accounts (often called an “employer match” or “profit sharing contribution”). A standard 401(k) is ideal for businesses with 1 or more non-owner common-law employees.
A Solo 401(k) is a flexible, low-maintenance plan that can adapt to your business.
It’s easier to maximize contributions. Although both have similar limits (~$70K), SEP IRAs cap contributions at 25% of your net income, which can make it harder to reach the max.
You have more control over your contributions. With a SEP IRA, you have to contribute the same percentage of compensation for all eligible employees. A Solo 401(k) gives you more control and flexibility.
You get access to loans. Solo 401(k)s allow you to borrow money from your account balance, which can be aa better option than a hardship withdrawal at a time of need. SEP IRAs do not allow for loans. Learn more
It scales with you. If you plan to hire employees later, a Solo 401(k) can seamlessly transition into a standard 401(k) plan, unlike a SEP IRA.
If you’d prefer to use a SEP IRA for your retirement savings, Guideline can help. Learn more about our SEP IRA offering here.
All 401(k) plans at Guideline include an auto-enrollment feature by default, meaning you automatically qualify for the Auto-Enrollment Tax Credit with a Guideline Solo 401(k) plan.
SECURE 2.0 introduced the Auto-Enrollment credit, which offers businesses who include auto-enrollment as a feature of their plan $1,500 over the first 3 years of the plan.