SEP IRA Calculator

2026

Calculate maximum SEP IRA contribution for self-employed. 2026 limit: $72,000 or 25% of compensation.
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Contribution Amount

Max SEP Contribution

$20,000.00

Your Contribution

$20,000.00

Annual Tax Savings

$4,400.00

Balance at 65

$1,353,529.41

2026 SEP IRA Limits

  • Maximum contribution: $72,000
  • Effective self-employed rate: ~20% of net SE income
  • Your marginal tax rate: 22%

Contribution & Growth Summary

Annual Contribution$20,000.00
Years to Retirement25
Total Contributions$500,000.00
Investment Growth$853,529.41
Projected Balance at 65$1,353,529.41

Year-by-Year Projection

Age 40$21,400.00
Age 45$153,080.42
Age 50$337,769.03
Age 55$596,804.35
Age 60$960,114.78
Age 64$1,353,529.41

Use the SEP IRA 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

Our SEP IRA Calculator helps self-employed individuals and small business owners determine their maximum allowable contribution to a Simplified Employee Pension (SEP) IRA for the 2026 tax year. Understanding your maximum contribution is crucial for maximizing your retirement savings and taking advantage of significant tax deductions. This calculator specifically incorporates the 2026 SEP IRA contribution limit of $72,000 and the 25% of compensation rule.

The calculator determines your maximum SEP IRA contribution by comparing two limits: a percentage of your net earnings from self-employment and the annual IRS contribution limit. First, your net earnings (after deducting one-half of your self-employment taxes and your SEP IRA contributions) are multiplied by 25%. Second, this calculated amount is capped at the 2026 IRS annual limit of $72,000.

Remember that 'compensation' for SEP IRA purposes is your net earnings from self-employment, which is your gross income less allowable business expenses and one-half of your self-employment tax. A common mistake is to use your gross income instead of your net earnings, which can lead to over-contributing. Also, ensure you are using the correct contribution rate of 25% of your *net* earnings, not 25% of your *gross* earnings.

Example: Self-Employed Photographer, 2026

  1. 1 Let's say a self-employed photographer has a gross income of $150,000 for 2026. After deducting business expenses of $30,000, their net earnings before self-employment tax are $120,000. Their self-employment tax is approximately $18,360, so one-half is $9,180.
  2. 2 First, we calculate their adjusted net earnings for SEP IRA purposes: $120,000 (net earnings before SE tax) - $9,180 (one-half SE tax) = $110,820. Then, we apply the 25% contribution rate: $110,820 * 0.25 = $27,705.
  3. 3 The maximum SEP IRA contribution for this photographer is $27,705. This amount is below the 2026 annual limit of $72,000.
  4. 4 This example demonstrates how the calculator considers your net earnings from self-employment and the specific IRS limits to determine your eligible contribution. By accurately inputting your income and expenses, you can ensure you are contributing the maximum allowed to your SEP IRA.

Source: IRS · Last updated: April 2026

Frequently Asked Questions

What is the SEP IRA contribution limit for 2026?
The 2026 SEP IRA limit is the lesser of 25% of net self-employment income (after the self-employment tax deduction) or $72,000. For employees, the limit is 25% of compensation up to $72,000.
Can I contribute to both a SEP IRA and a traditional IRA?
Yes, but your traditional IRA deduction may be limited since you are covered by an employer plan. In 2026, the traditional IRA deduction phases out for SEP IRA participants earning $83,000-$93,000 (single).
What is the SEP IRA deadline?
SEP IRA contributions for the 2025 tax year can be made until your tax filing deadline, including extensions. That means October 15, 2026, if you file an extension.

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