Unfortunately, that first response is incorrect. You can contribute the annual limit as an employee contribution. The emploYER contribution must come from profits and is max of 25% of profits.
Solo 401(k) contribution limits
The total solo 401(k) contribution limit is up to $61,000 in 2022 and $66,000 in 2023. There is a catch-up contribution of an extra $6,500 for those 50 or older in 2022 and $7,500 in 2023.
To understand solo 401(k) contribution rules, you want to think of yourself as two people: an employer (of yourself) and an employee (yes, also of yourself). Within that overall $61,000 contribution limit in 2022 and $66,000 in 2023, your contributions are subject to additional limits in each role:
As the employee, you can contribute up to $20,500 in 2022, $22,500 in 2023, or 100% of compensation, whichever is less. Those 50 or older get to contribute an additional $6,500 here in 2022 and $7,500 in 2023.
As the employer, you can make an additional profit-sharing contribution of up to 25% of your compensation or net self-employment income, which is your net profit less half your self-employment tax and the plan contributions you made for yourself. The limit on compensation that can be used to factor your contribution is $305,000 in 2022 and $330,000 in 2023
