SEP IRA Contribution Calculator
2026 rulesWork out your 2026 SEP IRA contribution from your net profit or S corp salary.
Your numbers
Result
Maximum 2026 SEP IRA contribution
- Net profit$120,000
- Less half of SE tax-$8,478
- Net earnings counted$111,522
- 20% of net earnings (25% of comp after the contribution)$22,304
- Contribution$22,304
- 2026 cap$72,000
A Solo 401(k) usually allows more at the same income because it adds an employee deferral on top of the 20%.
How it works
A sole proprietor can contribute 20% of net earnings, which is the 25% plan rate applied after the contribution itself is subtracted. Net earnings are profit minus half of self-employment tax. S corp owners use 25% of W-2 wages.
The 2026 cap is $72,000, and only the first $360,000 of compensation counts. You can contribute until your tax filing deadline, including extensions.
2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments); IRS Notice 2025-67 (2026 retirement plan limits); SSA 2026 COLA fact sheet; IRS Notice 2026-10 and Announcement 2026-11 (mileage).
Questions
SEP IRA or Solo 401(k)?
At the same income a Solo 401(k) allows more, because the $24,500 employee deferral is added on top of the employer share. A SEP is simpler and has no Form 5500 filing.
Do I have to contribute for employees?
Yes. A SEP requires the same percentage of pay for eligible employees as for yourself.
Related calculators
More in Self-employed and small business
- Solo 401(k) contribution$72,000 + catch-up
- Self-employment tax15.3% to $184.5k
- 1099 taxSet-aside %
- Quarterly estimated taxSafe harbor
- DoorDash and gig driver tax72.5¢ → 76¢/mi
- W-2 vs 1099Break-even pay
- S corp tax savingsSalary vs draw
- QBI deduction (Section 199A)20% of QBI
- Home office deduction$5/sq ft simple
- Section 179 deduction$2.56M limit
- Cost of an employeeWage + ~20-30%