SEP Contribution Limits (including grandfathered SARSEPs)
Contributions an employer can make for 2012 to an employee's SEP-IRA cannot exceed the lesser of:
-
- 25% of the employee's compensation or
- $50,000
- 25% of the employee's compensation or
Note: Elective deferrals and catch-up contributions are not permitted in SEP plans.
For 2013, contributions to an employee's SEP-IRA cannot exceed the lesser of:
-
- 25% of the employee's compensation or
- $51,000
- 25% of the employee's compensation or
Participants in Salary Reduction Simplified Employee Pension (SARSEP) plans established before 1997 were entitled to elective deferral contributions. For these plans, a participant’s elective deferral contributions are further limited to $17,000 in 2012 ($17,500 in 2013) or 100% of their compensation, whichever is less. Catch-up contributions are not subject to this limit.
Additional Resources:
Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
Publication 4333, SEP Retirement Plans for Small Businesses
FAQs regarding SEPs
