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SEP IRA contribution calculator

The most you can put into a SEP IRA for 2026, and how it compares with a Solo 401(k) on the same income. Nothing you type leaves this page.

A single-member LLC counts as a sole proprietor, and a multi-member LLC as a partnership, unless it chose to be taxed as a corporation.

Schedule C line 31, before retirement contributions

At the end of 2026

Your 2026 SEP IRA limit

$56,909

20% of net earnings
$56,909
A Solo 401(k) instead
$80,000
Difference
$23,091

A SEP has no salary deferral, so at most incomes a Solo 401(k) takes more. Most SEPs are also set up on an IRS form that cannot be used in a year the business has another plan, such as a cash balance plan. SEP IRA or cash balance plan

How a SEP IRA limit is worked out

A SEP IRA takes employer contributions only: up to 25% of pay, and no more than $72,000 in 2026. For a sole proprietor, pay is net earnings after half of self-employment tax and after the contribution itself, which works out to 20% of net earnings.

There is no salary deferral and no catch-up, which is why a Solo 401(k) usually allows more for the same income. A SEP is easy to open and has no annual filing, which is its appeal.

Most SEPs are set up on IRS Form 5305-SEP, which cannot be used in a year the business maintains another retirement plan. If you are adding a cash balance plan, the usual path is to replace the SEP with a Solo 401(k). See SEP IRA or cash balance plan.

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