SEP IRA Contribution Calculator

2026 rules

Work out your 2026 SEP IRA contribution from your net profit or S corp salary.

Your numbers

Business type

Net profit (Schedule C) or W-2 salary

Result

Maximum 2026 SEP IRA contribution$22,304

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.