SEP IRA Contribution Calculator
2026Calculate max SEP IRA contribution with the self-employed adjustment. 2026 cap: $72,000.
By Konstantin Iakovlev · Updated September 2026 · Source: IRS Publication 560 — Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
Max SEP Contribution
$27,900.00
Effective Contribution Rate
18.60%
Tax Savings (24% bracket)
$6,696.00
Contribution Calculation
| Net SE Income | $150,000.00 |
| Less: 50% of SE Tax | - $10,500.00 |
| Adjusted Income | $139,500.00 |
| Contribution (20% of adjusted) | $27,900.00 |
| Your SEP Contribution | $27,900.00 |
Estimated Tax Savings by Bracket
| 22% Bracket | $6,138.00 |
| 24% Bracket | $6,696.00 |
| 32% Bracket | $8,928.00 |
Use the SEP IRA Contribution Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Self-employed workers and small business owners can shelter a sizable share of income through a SEP IRA, and this tool pins down the maximum contribution allowed for the 2026 tax year with the self-employment tax adjustment built in. Knowing that ceiling matters, because it drives both your retirement savings and the deduction you can claim. For 2026 the cap reaches $72,000, which is what makes the plan such a heavyweight savings option.
Two steps govern the math. The first finds your net earnings from self-employment by taking your net profit (Schedule C or K-1) and subtracting one-half of the self-employment tax you enter. The second takes 20% of that adjusted figure and caps the result at the 2026 limit of $72,000. The 20% is the IRS's self-employed equivalent of a 25% plan rate: your compensation is figured after the contribution itself is deducted, and 25% of what remains works out to 20% of the amount before it.
For a self-employed person, 'compensation' means net earnings from self-employment after subtracting both half of the self-employment tax and the contribution itself, not your gross income. That is why the maximum is 20% of the adjusted figure rather than 25%, and applying 25% to it is the error that trips up many filers. Contributions you've directed to other qualified plans also enter the picture, since they bear on your overall limit.
Example: Freelance Designer's 2026 SEP IRA Contribution
- 1 Input: a freelance graphic designer has $150,000 of net profit on Schedule C for 2026 and $21,194 of self-employment tax (Schedule SE: $150,000 × 92.35% × 15.3%, all below the $184,500 Social Security wage base).
- 2 Adjusted net earnings: half of the self-employment tax is $10,597, so $150,000 − $10,597 = $139,403.
- 3 Maximum contribution: 20% × $139,403 = $27,880.60, well under the $72,000 cap. The 20% is the self-employed rate for a 25% plan (0.25 ÷ 1.25).
- 4 Check: compensation after the contribution is $139,403 − $27,880.60 = $111,522.40, and 25% of that is $27,880.60. Applying 25% straight to $139,403 would give $34,850.75, an excess contribution. The $27,880.60 is 18.6% of the $150,000 profit, and in the 24% bracket the deduction saves about $6,691 of federal tax.
Source: IRS Publication 560 — Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) · Last updated: September 2026
Frequently Asked Questions
How much can I contribute to a SEP IRA in 2026?
What is the SEP IRA deadline for contributions?
Can I have a SEP IRA and a Traditional IRA?
You might also need
401(k) Calculator 2026 — Retirement Savings & Employer Match
Calculate your 401(k) balance at retirement with employer match and growth projections. Compare Roth vs Traditional. Based on 2026 IRS contribution limits.
Roth IRA Calculator 2026 — Growth, Limits & Tax-Free Income
Calculate Roth IRA growth projections and tax-free withdrawals. Compare to Traditional IRA side by side. Free, instant results with 2026 contribution limits.
Roth Conversion Calculator 2026 — Tax Impact & Break-Even
Calculate the tax impact of converting a Traditional IRA to Roth. See your break-even year and multi-year projections. Free, instant results for 2026 rates.