SEP IRA Contribution Calculator

2026

Calculate max SEP IRA contribution with the self-employed adjustment. 2026 cap: $72,000.
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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

Our SEP IRA Contribution Calculator helps self-employed individuals and small business owners determine their maximum allowable contribution for the 2026 tax year, incorporating the special self-employment tax adjustment. Understanding your maximum contribution is crucial for maximizing your retirement savings and taking advantage of significant tax deductions. The 2026 SEP IRA contribution cap is set at an impressive $72,000, making this a powerful retirement vehicle.

This calculator uses a two-step process to account for the self-employment tax adjustment. First, it calculates your 'net earnings from self-employment' by subtracting one-half of your self-employment tax from your gross self-employment income. Then, your maximum SEP IRA contribution is determined by multiplying this adjusted net earnings figure by your chosen contribution rate (up to 25%), ensuring the result does not exceed the 2026 cap of $72,000 or 25% of your compensation, whichever is less.

Remember that 'compensation' for SEP IRA purposes for self-employed individuals is your net earnings from self-employment, adjusted as described above. Don't confuse the 25% contribution rate with 25% of your gross income; it's 25% of your *adjusted* net earnings. Also, ensure you factor in any other employer contributions made to other qualified plans, as these can affect your overall limit.

Example: Freelance Designer's 2026 SEP IRA Contribution

  1. 1 Step 1: Input Gross Self-Employment Income. Let's say a freelance graphic designer has gross self-employment income of $150,000 for 2026.
  2. 2 Step 2: Calculate Adjusted Net Earnings. The calculator first determines the self-employment tax (social security and Medicare) on the $150,000, which is approximately $21,195. Then, half of this ($10,597.50) is subtracted from the gross income, resulting in adjusted net earnings of $139,402.50.
  3. 3 Step 3: Determine Maximum Contribution. The maximum contribution is 25% of the adjusted net earnings: 0.25 * $139,402.50 = $34,850.63. Since this is below the $72,000 cap, the full amount is allowed.
  4. 4 Step 4: Result. The freelance designer can contribute $34,850.63 to their SEP IRA for the 2026 tax year, significantly reducing their taxable income while boosting their retirement savings.

Source: IRS · Last updated: April 2026

Frequently Asked Questions

How much can I contribute to a SEP IRA in 2026?
The 2026 SEP IRA limit is 25% of net self-employment income (after the self-employment tax deduction) up to a maximum of $72,000. For sole proprietors, the effective rate works out to about 20% of net Schedule C profit due to the SE tax adjustment.
What is the SEP IRA deadline for contributions?
SEP IRA contributions can be made up to the tax filing deadline, including extensions. For sole proprietors, that is April 15, 2027 (or October 15, 2027 with an extension) for 2026 contributions. You can even open a new SEP IRA at the filing deadline.
Can I have a SEP IRA and a Traditional IRA?
Yes, but your employer SEP contributions may affect the deductibility of your Traditional IRA contribution. If you are an active participant in a SEP plan, the IRA deduction phases out at MAGI of $83,000-$93,000 (single) in 2026. You can still make non-deductible contributions or contribute to a Roth IRA.

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