Calculator
SEP IRA calculator
For a sole proprietor or single-member LLC filing Schedule C. Uses the 2026 Social Security wage base for SE tax.
2026 SEP IRA contribution$18,58720% of net earnings after half of SE tax
| Net profit (Schedule C) | $100,000 |
|---|---|
| Self-employment tax | $14,130 |
| Less half of SE tax | −$7,065 |
| Net earnings for the plan | $92,935 |
| × self-employed rate 20% | $18,587 |
| 2026 dollar limit | $72,000 |
| Maximum SEP contribution | $18,587 |
IRS Publication 560 rate table: a 25% plan rate becomes 20% for the owner because the contribution itself reduces the earnings it is based on. Employees’ SEP contributions use the plan rate on their W-2 pay.
The link keeps your inputs, so you can save or share this scenario.
How the SEP IRA calculator works
The calculator follows the IRS Publication 560 "Deduction Worksheet for Self-Employed": your contribution is a percentage of net earnings after the deduction for half of self-employment tax, and the percentage itself is reduced because the contribution lowers the earnings it is based on[p560][secalc]:
- Net profit from Schedule C, minus half of self-employment tax = net earnings for the plan.
- Self-employed rate = plan rate ÷ (1 + plan rate). A 25% plan gives 0.25 ÷ 1.25 = 20%.
- Net earnings × that rate, but no more than $360,000 × the plan rate (the 2026 compensation cap) and no more than the $72,000 dollar limit.
| Plan rate | Your rate as owner |
|---|---|
| 5% | 0.047619 |
| 10% | 0.090909 |
| 15% | 0.130435 |
| 20% | 0.166667 |
| 25% | 0.200000 |
SEP contribution limits for 2025, 2026 and 2027
SEP contribution limits are the same as the 415(c) limit for all defined contribution plans: $72,000 for 2026, with $360,000 of pay counted at most[n2567]. The 2026 SEP IRA contribution limits move to $75,000 and $375,000 in 2027[n2667].
| Limit | 2025 | 2026 | 2027 |
|---|---|---|---|
| Most per person | $70,000 | $72,000 | $75,000 |
| Compensation counted | $350,000 | $360,000 | $375,000 |
| Employee: % of pay | 25% | 25% | 25% |
| Owner: % of net earnings (25% plan) | 20% | 20% | 20% |
| Minimum pay to be included | $750 | $800 | $800 |
| Catch-up contributions | none | none | none |
You reach the $72,000 cap at about $376,500 of 2026 net profit. Below that, the SEP is 20% of net earnings:
| Net profit | SE tax | Net earnings | SEP contribution |
|---|---|---|---|
| $30,000 | $4,239 | $27,881 | $5,576 |
| $50,000 | $7,065 | $46,468 | $9,294 |
| $75,000 | $10,597 | $69,701 | $13,940 |
| $100,000 | $14,130 | $92,935 | $18,587 |
| $150,000 | $21,194 | $139,403 | $27,881 |
| $200,000 | $28,234 | $185,883 | $37,177 |
| $300,000 | $30,912 | $284,544 | $56,909 |
| $376,500 | $32,961 | $360,019 | $72,000 |
Worked examples
2026, 25% plan, $100,000 profit. Self-employment tax is $14,129.55; half of it, $7,064.78, comes off profit, leaving $92,935.23. Times 20% = $18,587.05. Check: profit − half SE tax − contribution = $74,348.18, and 25% of that is $18,587.05, the same amount.
The IRS's own example (2025). A sole proprietor with an 8½% plan and $200,000 of Schedule C profit deducts $13,596 for half of SE tax, leaving $186,404. The rate worksheet gives 0.085 ÷ 1.085 = 0.078 (rounded to three places), so the deduction is $186,404 × 0.078 = $14,540[p560]. This calculator uses the unrounded rate, which gives about $60 more for an 8½% plan; for whole-number rates such as 25% the two methods agree.
Rules for SEP IRAs
- Eligible employees must be covered if they are 21 or older, worked for you in 3 of the last 5 years and earned at least $800 in 2026, and each gets the plan rate on their own pay (25% of pay if your plan rate is 25%)[sepfaq].
- Deadline: a SEP can be set up and funded as late as your tax return due date, including extensions[sepfaq].
- Roth option: under SECURE 2.0 the plan may accept Roth SEP contributions, which are taxable now[sepfaq].
- No employee deferrals or catch-ups. A SEP is employer money only; a solo 401(k) adds an employee deferral on top.
Common mistakes with SEP IRA contributions
- Using 25% of profit. For yourself it is 20% of net earnings after half of SE tax: $18,587 on $100,000, not $25,000.
- Forgetting employees. If you give yourself 20%, eligible employees get 25% of their pay.
- Assuming a catch-up. SEPs have no age-50 catch-up; the solo 401(k) calculator shows how much more an owner can put in with deferrals and catch-ups.
- Mixing up SEP and SIMPLE. A SIMPLE IRA has employee deferrals with lower limits; see SIMPLE IRA contribution limits.
Next stepSee what the contributions grow to with the 401(k) calculator (enter your contribution as a percentage of pay), and compare all accounts in the 2026 contribution limits table.
Frequently asked questions
How much can I contribute to a SEP IRA in 2026?
As a self-employed owner, 20% of net profit after the deduction for half of self-employment tax, up to $72,000. As an employee, your employer can contribute up to 25% of your pay (counting pay up to $360,000), up to $72,000.
What are the 2026 SEP IRA contribution limits?
$72,000 per person, on compensation up to $360,000, with no catch-up contributions. For 2027 the limits are $75,000 and $375,000.
How do I calculate my SEP IRA contribution as a sole proprietor?
Take Schedule C net profit, subtract half of your self-employment tax, and multiply by your plan rate divided by one plus the plan rate (20% for a 25% plan). IRS Publication 560 has the worksheet and rate table.
What is the deadline for a 2026 SEP IRA contribution?
The due date of your 2026 tax return, including extensions. You can also set up the SEP as late as that date.
Sources
- Publication 560 (2025), Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
- Simplified Employee Pension plan (SEP)
- Notice 2025-67, 2026 Amounts Relating to Retirement Plans and IRAs
- Notice 2026-66, 2027 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
- Self-employed individuals: Calculating your own retirement plan contribution and deduction