"I thought the limit for Employer Contribution is 0.25% of the net business income"
That's incorrect. The maximum employer contribution for a self-employed individual is 20% of net earnings. Net earnings are net profit minus the deductible portion of self-employment taxes. The 25% base rate reduces to 20% because the employer contribution effectively reduces the net earnings on which the 25% base rate would apply. With no W-2 income where you pay Social Security and Medicare taxes that would reduce your self-employment tax, your maximum employer contribution with $178,650 of net profit is $33,206.
Your maximum elective deferral of $30,500 (including catch-up) plus the $33,206 employer contribution means a maximum contribution of $63,706. TurboTax will not flag an excess employer contribution that you enter, but it will limit the deduction to $63,706 under the assumption that $30,500 of it is actually elective deferral and not employer contribution.
