SEP IRA Contribution Calculator (2026)

Your numbers

Uses the IRS Publication 560 reduced-rate method for sole proprietors: net earnings = profit minus the deductible half of self-employment tax, then contribution = plan rate ÷ (1 + plan rate) × net earnings, capped at the lesser of 25% of the $360,000 compensation limit or the $72,000 dollar limit. Social Security wage base for the SE-tax step is $184,500 (2026). Sources: IRS SEP limits, IRS COLA table, Publication 560. Check SE tax alone with the self-employment tax calculator; funding each invoice with the tax set-aside calculator. Prefer elective deferrals plus profit-sharing? Use the Solo 401(k) contribution calculator.

Track profit so the SEP math is real

The Freelancer Income & Quarterly Tax Tracker logs invoices and expenses so your Schedule C profit (and this SEP estimate) stay current through the year. Excel and Google Sheets, instant download.

Questions

What is the SEP IRA contribution limit for 2026?

For employees, the lesser of 25% of compensation or $72,000, counting pay up to $360,000. For your own SEP as a sole proprietor using a 25% plan rate, that works out to 20% of net earnings from self-employment after the deduction for half of self-employment tax, still capped at $72,000.

Why is my limit 20% instead of 25%?

Your own contribution reduces the compensation used to calculate that contribution. The IRS lets you use a reduced rate: plan rate divided by (1 + plan rate). At 25%, that is 20%.

When can I contribute for 2026?

Employer SEP contributions for a year can generally be made by the due date of your return, including extensions. Confirm timing with your custodian and a tax professional.

Does this work if I have employees?

This page only estimates your own sole-proprietor contribution. If you have employees who must be covered, SEP rules require comparable contributions for them, which this calculator does not model.

Is this tax or investment advice?

No. It is a free planning calculator based on general 2026 IRS limits. Entity type, other plans, and your plan document can change the result.