October DealsAmazon USOctober deal check: compare before you payAmazon US: current deals, useful picks and tech finds.Check DealsPC HealthRecommendedCrashes, freezes, slowdowns? Check your PC nowSpot repairable issues before they interrupt work.Check PCOctober DealsAmazon USDeal season is back - check today's better picksAmazon US: current deals, useful picks and tech finds.See Picks×
Skip to content
The Finance Base
The Money Desk · Blog
Re:

SEP-IRA Contribution Limits and Deadlines for 2025 and 2026

The SEP-IRA limit is $72,000 for 2026 and $70,000 for 2025, subject to compensation limits. Contribution deadlines follow the employer’s tax-return due date, including extensions.
From TheFinanceBase Team3 min to read
Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

For tax year 2026, an employer can generally contribute the lesser of 25% of an eligible employee’s compensation or $72,000 to that employee’s SEP-IRA. For 2025, the dollar limit was $70,000. Self-employed owners use a different calculation, and the contribution deadline is tied to the due date—including extensions—of the employer’s federal income tax return, not to one universal date.

SEP-IRA contribution limits for 2025 and 2026

SEP limits are annual, so use the limit for the tax year the contribution is for—not the year you happen to make it. The compensation ceiling also limits how much pay can count toward the calculation.

Tax year Maximum contribution per participant Maximum compensation counted
2025 Lesser of 25% of compensation or $70,000 $350,000
2026 Lesser of 25% of compensation or $72,000 $360,000

These are IRS limits; compensation above the annual ceiling is excluded when applying the contribution limit. The plan document determines the contribution method and allocation. Employers generally use the same contribution percentage for eligible participants. See the IRS’s SEP contribution limits and Publication 560.

Employees

For an employee, the employer’s contribution is generally capped at the lesser of 25% of the employee’s eligible compensation or the applicable annual dollar maximum. An employee does not make an elective salary deferral to an ordinary SEP-IRA.

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

Self-employed owners

A sole proprietor or other self-employed owner cannot reliably calculate their own SEP contribution by multiplying gross business income—or even net profit—by 25%. The IRS calculation starts with net earnings from self-employment and accounts for the deduction for one-half of self-employment tax and the owner’s SEP contribution. Use the worksheet and method in IRS Publication 560 or consult a tax professional; the employee formula is not a substitute for the owner calculation.

SEP contributions and your regular IRA limit

Employer SEP contributions do not reduce the amount an individual may contribute to a traditional or Roth IRA under the ordinary IRA rules. These are separate contribution categories. An ordinary SEP is employer-funded and does not permit employee elective deferrals or catch-up contributions. A grandfathered SARSEP is a distinct arrangement that may allow salary deferrals under separate rules; do not apply those rules to a regular SEP. The IRS explains the distinction in its SEP contribution limits guidance and Publication 560.

Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Support on Ko-Fi

When is a SEP-IRA contribution due?

The usual deadline for both establishing a SEP and making its employer contribution is the due date, including extensions, of the employer’s federal income tax return for the year. The IRS states: “Employer contributions must be made by the due date (including extensions) for filing your federal income tax return for the year.” See the IRS’s SEP plan guidance.

That rule means the relevant deadline depends on the business’s entity and return type. Partnership, S corporation, C corporation, and sole-proprietor returns follow different filing calendars, so April 15 is not a universal SEP deadline. Check the due date for the employer’s return, whether an extension was properly obtained, and the plan document.

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

Example: 2025 contributions for an individual filer

For most calendar-year individual filers, the original due date for a 2025 federal income tax return was April 15, 2026. As of October 7, 2026, that date has passed. A properly requested automatic six-month extension may extend the filing deadline and, where it extends the applicable return due date, the SEP funding window. Confirm the extension applies to the return governing the SEP and check for any special deadline that applies to your circumstances. An extension to file is not an extension to pay tax, as the IRS explains in its tax calendar guidance.

What to confirm before contributing

  • Tax year: Match the contribution and limit to 2025 or 2026.
  • Plan terms: Confirm the plan document’s compensation definition, contribution method, eligible participants, and allocation rules.
  • Owner calculation: If contributing for yourself as a self-employed owner, use the IRS net-earnings method rather than 25% of gross income.
  • Return deadline: Identify the employer’s return type and due date, then account for any valid extension or applicable special deadline.
  • Tax treatment: IRS guidance here addresses federal rules; it does not establish how your state treats SEP contributions.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

Leave a Reply

Your email address will not be published. Required fields are marked *

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

More post from the Money Desk

  1. The Money DeskBlogTheFinanceBase09 OCT 267 minMortgage Escrow FAQs: Taxes, Insurance, Shortages, and Refunds
  2. The Money DeskBlogTheFinanceBase09 OCT 265 minHow Mortgage Escrow Accounts Work and What Homeowners Pay For
  3. The Money DeskBlogTheFinanceBase09 OCT 265 minHow to Read a Stock Chart, Volume and Market-Cap Data
Recommended PC Tool
Recommended PC Tool
Outdated Drivers Are Slowing You DownFree scan - exact matches
PC Slower Than It Used to Be?Free scan - under a minute

Two free Windows tools

One Free Minute Could Fix That PC

Before you go - each of these free tools takes about a minute and tackles what quietly slows a Windows PC down.

Special offer. View Outbyte info, uninstall instructions, EULA, and Privacy Policy.