SEP IRA Calculator

2026

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

By Konstantin Iakovlev · Updated April 2026 · Source: IRS

$
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

For the self-employed and small business owners, a Simplified Employee Pension (SEP) IRA is one of the most generous retirement shelters available, and pinning down your maximum contribution is the first step to using it fully. The deduction can be substantial, but only if the number is right. This tool works the 2026 tax year specifically, applying the $72,000 SEP IRA contribution limit alongside the 25% of compensation rule.

Two ceilings decide your maximum, and the calculator measures both. It takes your net earnings from self-employment, the figure left after deducting one-half of your self-employment taxes and your SEP IRA contributions, and multiplies by 25%. That result is then held against the 2026 IRS annual cap of $72,000, and the lower of the two governs.

For SEP IRA purposes, 'compensation' means net earnings from self-employment, gross income less allowable business expenses and one-half of your self-employment tax, not the top-line revenue your business brought in. Reaching for gross income is the classic overshoot and a fast path to over-contributing. The same care applies to the rate: it is 25% of your *net* earnings, never 25% of your *gross*.

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.

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.