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SEP Contribution Limits (including grandfathered SARSEPs)

Contributions an employer can make to an employee's SEP-IRA cannot exceed the lesser of:

  1. 25% of the employee's compensation, or
  2. $51,000 (for 2013, $52,000 for 2014).

Note: Elective deferrals and catch-up contributions are not permitted in SEP plans.

If you’ve contributed more than the annual limits to an employee’s SEP-IRA, find out how to correct this mistake.

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 $17,500 (in 2013 and 2014) or 25% 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

Page Last Reviewed or Updated: 12-Aug-2014