Relief work can pay well, but no employer matches your retirement savings. As a 1099 contractor, you are both the business and the worker, so the retirement plan is your job too. For most relief DVMs, the choice comes down to two accounts: the Solo 401(k) and the SEP-IRA.
Both accounts let you put pre-tax money away and cut this year’s tax bill. They do not shelter the same amount at the same income, and they handle Roth money differently. This post walks through the Solo 401(k) vs SEP-IRA decision and tells you where to check current figures. This blog post is for education only, not tax advice, so run your final plan past a CPA.
A SEP-IRA is the simpler of the two. Only employer contributions go in, and they are calculated as a percentage of your net self-employment earnings. Setup takes a short form at most brokerages, and the annual paperwork is light. You decide how much to contribute each year, including nothing.
A Solo 401(k) is built for a business owner with no employees other than a spouse. That describes most relief vets working 1099 shifts. The account takes money in two roles. As the employee, you make an elective deferral from your earnings. As the employer, you add a contribution calculated much like a SEP. Those two layers explain almost every difference below.
| Feature | SEP-IRA | Solo 401(k) |
|---|---|---|
| Who can open it | Any self-employed person | Self-employed with no employees except a spouse |
| Contribution types | Employer contribution only | Employee deferral plus employer contribution |
| How the amount is set | A percentage of net earnings | A flat deferral plus a percentage |
| Roth option | Limited, depends on the provider | Roth deferrals are common, depends on the plan |
| Paperwork | Minimal | More, including an annual filing once assets pass an IRS threshold |
For 2026, the SEP-IRA ceiling is $72,000. You only reach it at a high income, because the contribution is a percentage of net earnings, not a flat amount. The IRS adjusts both the limit and the calculation, so verify the current numbers on the IRS SEP contribution limits page before you fund the account.
The Solo 401(k) sits under the same overall annual ceiling for combined contributions. The difference is how fast you get there. The employee deferral is a flat dollar amount the IRS sets each year, and older DVMs can add a catch-up contribution on top. We are not quoting the deferral or catch-up figures here because they change annually. Pull them from irs.gov or your plan provider when you open the account.
One catch if you also hold an associate job: the employee deferral limit is per person, not per plan. Anything you defer into an employer’s 401(k) counts against the same limit. The employer side of your Solo 401(k) is still available on your relief earnings.
Because the SEP is purely percentage-based, a relief vet with a moderate income can only put away a slice of it. The Solo 401(k) lets you stack the flat employee deferral on top of that same slice. At most relief incomes, that stacking is the whole advantage.
Your own number depends on your shifts. Pay varies by city, shift type and what you and the clinic agree: GP work runs $55 to $125/hr nationally and GP day rates run $600 to $1,000/day, with ER, specialty and last-minute work paying more. Check current relief vet pay rates for your region, then model your year with the relief vet schedule planning guide.
Many Solo 401(k) plans let you make the employee deferral as Roth. Roth money goes in after tax. You get no deduction this year, but qualified withdrawals in retirement come out tax-free, growth included. The employer contribution is traditionally pre-tax.
That choice matters because relief income moves. A year when you ramp up, take extended time off, or split time with an associate role may put you in a lower bracket. That is when paying the tax now through Roth makes sense. In a strong year, pre-tax deferrals save more today. With a Solo 401(k), you can make that call each year.
SEP-IRAs were historically pre-tax only. Some providers now offer a Roth option inside a SEP, but availability varies, so ask before you assume. If Roth flexibility is a priority, the Solo 401(k) is the more reliable place to get it.
Pre-tax contributions to either account are deducted from your income for federal income tax. As a sole proprietor, you take the deduction on your personal return, so every pre-tax dollar you contribute shrinks the income your bracket applies to. State treatment varies, so check yours.
What these accounts do not reduce is self-employment tax. Social Security and Medicare tax is figured on your net earnings before the retirement deduction, so a large contribution lowers income tax but not SE tax. The IRS self-employment tax page explains the calculation. Roth deferrals lower neither tax this year. Their payoff comes later.
Timing matters too. A SEP is forgiving, and you can typically open and fund it close to your filing deadline. Solo 401(k) setup and deferral elections have stricter timing, so confirm the current-year deadlines with your CPA well before December. The complete relief vet tax guide covers quarterly estimates and the deductions that sit around these contributions.
Match the account to your income pattern and how much paperwork you will tolerate.
Whichever you pick, automate it. Relief income varies month to month, so move a fixed share of each deposit into retirement the same way you set aside money for taxes. Retirement is one piece of replacing employer benefits; the relief vet insurance guide covers health and disability coverage.
FlexVet relief vets are 1099 contractors, so there is no employer plan to join, which is exactly why these accounts matter. FlexVet handles the income side: you submit your hours, FlexVet invoices and collects from the clinic, and you are paid weekly by direct deposit with 100% of your agreed rate. Weekly deposits make an automatic contribution easy.
You can hold both accounts, but contributing to both for the same business in the same year gets complicated, and the overall annual ceiling still applies across your plans. Most relief vets fund one account per year. If you are switching from a SEP to a Solo 401(k), ask your CPA how to time the move so you do not create an excess contribution.
Yes, on the employee side. The elective deferral limit is per person across every 401(k) you contribute to, so deferrals at your associate job reduce what you can defer into your Solo 401(k). The employer contribution in your Solo 401(k) is based on your relief earnings and is still available. Track both accounts so you stay under the limit.
No. Pre-tax SEP and Solo 401(k) contributions lower your federal income tax, but self-employment tax is calculated on net earnings before the retirement deduction. You still owe Social Security and Medicare tax on your relief income. Build that into your quarterly estimates, and keep setting aside part of each deposit for taxes.
No. FlexVet relief vets are independent 1099 contractors, not employees, so there is no employer-sponsored plan or match. That is why a Solo 401(k) or SEP-IRA matters. FlexVet pays you weekly by direct deposit and you keep 100% of your agreed rate, which makes it simple to automate a retirement contribution from every deposit.
FlexVet connects licensed DVMs with veterinary clinics across the US. Explore relief vet pay, licensing, and open markets across 58 metro areas in 30 states.
FlexVet connects licensed DVMs with veterinary clinics across the US. Browse open relief shifts or learn more about how it works.
