SEP IRA calculator

Find the most you can put in a SEP IRA for 2026 as a sole proprietor or as an employee of your own corporation, with every step of the IRS worksheet shown.

By the Calcist team · Checked against known answers · Updated October 27, 2026

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Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.

Next: Want to put in more on the same income? Compare with the solo 401(k) calculator.

2026 SEP IRA limits

A SEP contribution can't be more than 25% of compensation or $72,000, whichever is less. Only the first $360,000 of compensation counts. There's no catch-up contribution in a SEP.

How it's calculated for the self-employed

Your "compensation" is your net profit minus half your self-employment tax and minus the contribution itself. Because the contribution reduces the pay it's based on, IRS Publication 560 uses a reduced rate:

Reduced rate = plan rate ÷ (1 + plan rate) → 25% ÷ 125% = 20%
Net earnings = net profit × 92.35%
SE tax = 12.4% × net earnings (up to $184,500) + 2.9% × net earnings
Contribution = (net profit − ½ SE tax) × reduced rate, capped at $72,000 and at $360,000 × plan rate

This follows the Deduction Worksheet for Self-Employed in Publication 560, chapter 5. Employees of a corporation, including an S-corporation owner on salary, simply use 25% of W-2 pay.

Worked example

Net profit $100,000. Net earnings = $92,350. SE tax = 15.3% × $92,350 = $14,129.55, so the deduction for half is $7,064.78. $100,000 − $7,064.775 = $92,935.23 (using the unrounded half). × 20% = $18,587.05. That's 25% of the $74,348.18 left after the contribution, as the plan formula requires.

The IRS's own example uses a 10% plan rate: 10% ÷ 110% = 9.0909%, and $92,935 × 9.0909% = $8,449.

When this doesn't fit

Employees. If you have eligible employees, you must contribute the same percent of pay for them. This shows only your own contribution.
Several businesses or a loss in one: combine net earnings the way Schedule SE does. A loss reduces your compensation.
Other plans. The $72,000 limit is shared with any other defined contribution plan of the same business, including a solo 401(k).
The 0.9% Additional Medicare Tax isn't part of the deductible half of SE tax and is left out.
Farm optional and nonfarm optional SE methods and church employee income aren't covered.

Sources

IRS Notice 2025-67 – $72,000 limit and $360,000 compensation limit for 2026
IRS Publication 560 – rate table and deduction worksheet for the self-employed
IRS: calculating your own retirement plan contribution – reduced rate method and example
IRS: SEP contribution limits – lesser of 25% of compensation or the dollar limit
IRS Topic 554, self-employment tax – 92.35% and the $400 threshold
SSA contribution and benefit base – $184,500 wage base for 2026

How we checked this

Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:

Net profit $100,000: $18,587.05 (20% of $92,935.23) ✓
Same: SE tax 15.3% × $92,350 = $14,129.55 ✓
IRS example, 10% plan rate: $8,448.66 (IRS rounds to $8,449) ✓
Net profit $500,000: capped at $72,000 ✓
W-2 job already at the $184,500 wage base: $19,732.19 ✓
Corporation, W-2 $100,000: $25,000 ✓
Edge: net profit $300, under the $400 SE floor: $60 ✓

Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.

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Questions people ask

What is the SEP IRA limit for 2026?

The lesser of 25% of compensation or $72,000. For a sole proprietor that works out to about 20% of net profit after the deduction for half of self-employment tax.

Why is it 20% and not 25% for self-employed people?

Your compensation is net earnings after the SEP contribution itself. A contribution of 25% of what's left equals 20% of the amount before the contribution: 0.25 ÷ 1.25 = 0.20.

How much profit do I need to put in $72,000?

Net profit minus half your SE tax must be at least $360,000 (20% of it is $72,000). Because of the Social Security wage base, that's a net profit of about $376,500 for 2026.

Is there a catch-up contribution in a SEP IRA?

No. SEP IRAs only take employer contributions. If you're 50 or older and want catch-up room, a solo 401(k) allows it.

When is the SEP contribution due?

By your tax return due date for the year, including extensions.

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