2026 SEP IRA Contribution Limits

The official 2026 SEP IRA contribution cap and the minimum-compensation threshold for plan coverage.

The 2026 SEP IRA contribution limit is the lesser of 25% of an employee’s compensation or $72,000. Only an employer contributes to a SEP IRA — there is no employee deferral and no catch-up. An employee must be paid at least $800 in 2026 to be covered under the plan.

Official  Published by the IRS for tax year 2026 (IRS Notice 2025-67). These are the figures for income earned in 2026, reported on the 2026 return filed in early 2027. Planning for 2027? See the 2027 figures →

SEP IRA limits, 2026 — IRS Notice 2025-67
Limit2026
SEP contribution limitLesser of 25% of compensation or this dollar cap $72,000
SEP minimum compensation thresholdAn employee must earn at least this to be covered $800

A SEP is entirely employer-funded, at the same percentage of pay for every eligible employee — including the owner. The dollar cap is the same §415(c) figure that bounds a 401(k)’s total annual additions (see the 2026 401(k) limits), so self-employed people sometimes compare the two before choosing a plan.

Your 2026 SEP contribution

For a sole proprietor this is net self-employment earnings after the deduction for half of self-employment tax and the plan contribution itself; a simple 25%-of-pay estimate is shown here.

Paid tool Deciding between pre-tax contributions now and Roth conversions later is a multi-year bracket problem: every dollar deferred today has to come out later, in a year whose bracket and Medicare surcharge you are also choosing. The Roth Conversion Planner works that schedule: how much to convert in each year from now to your plan end age, the federal and state tax it costs, the IRMAA tier that year’s MAGI sets two years later, and the ACA subsidy it affects — set beside the same years with no conversions at all, and downloadable as a PDF you keep. A planning tool, not advice: the numbers move when your assumptions do. Build my conversion schedule — Personal PRO ($49) → See what is included, and price this year free, first →

A SEP scales with income, so the room it gives you changes every year your business does. QuantCalc runs your whole retirement — withdrawals, taxes, Medicare surcharges — year by year, on the 2026 figures above.

Run the free tax-aware simulation →

Common questions

What is the SEP IRA contribution limit for 2026?

The 2026 SEP IRA contribution limit is the lesser of 25% of an employee’s compensation or $72,000. Only an employer contributes to a SEP IRA — there is no employee deferral and no catch-up. An employee must be paid at least $800 in 2026 to be covered under the plan. Source: IRS Notice 2025-67.

Who contributes to a SEP IRA?

Only the employer. There is no employee salary deferral in a SEP, and therefore no catch-up contribution at 50 or older — the whole limit is the employer’s 25%-of-pay contribution, capped at $72,000 (IRS Notice 2025-67).

What are the 2027 SEP IRA limits?

See the 2027 SEP IRA contribution limits, with the status of the 2027 figure marked.

Sources

Every figure on this page is read at build time from QuantCalc’s tax constants, the same ones the planner runs on, and was checked against the text of the documents above. Every figure with its source: JSON. QuantCalc is calculation software, not tax advice.

Related

2026 SIMPLE IRA contribution limits → 2026 IRA contribution limits → 2026 401(k) contribution limits →

A SEP scales with income, so the room it gives you changes every year your business does — see the whole picture in the free planner →