Retirement & benefits · 2026
SEP IRA Contribution Calculator
For a sole proprietor, the SEP limit is 20% of net earnings after the deductible half of self-employment tax.
W-2 wages can reduce the Social Security part of self-employment tax.
- Adjusted net earnings
- $111,522
- Deductible half of SE tax
- $8,477.73
- Effective rate on net profit
- 18.6%
- Hit the $72,000 cap
- No
Transparent method
How this calculator works
- Estimate net earnings after the deductible half of self-employment tax.
- Apply the effective 20% sole-proprietor contribution rate.
- Cap the result at the 2026 defined-contribution limit.
What the result does not include
- The calculation assumes a sole proprietor. Corporate and partnership contribution formulas use compensation reported differently.
- An employer with eligible employees generally must contribute the same compensation percentage for them.
Common questions
Can I contribute to a SEP and a traditional IRA in the same year?
Yes. Your personal IRA contribution limit is separate from the SEP employer contribution. Being covered by a SEP may reduce how much of the traditional IRA contribution is deductible, depending on income.
What if I have employees?
A SEP requires you to contribute the same percentage of compensation for every eligible employee. This calculator assumes a sole proprietor with no employees. With staff, the cost scales fast and a 401(k) is usually the better structure.