1099/Money DeskTax year 2026

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.

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W-2 wages can reduce the Social Security part of self-employment tax.

Maximum SEP contribution$22,304
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
US federal planning estimate only. This calculator uses published federal rules for tax year 2026. It does not model state or local tax, credits, nonresident-alien or dual-status returns, US territories, treaties, foreign income exclusions or credits, or tax systems outside the United States. It is not tax or financial advice. Rates last verified 2026-07-25.
Sources

Transparent method

How this calculator works

  1. Estimate net earnings after the deductible half of self-employment tax.
  2. Apply the effective 20% sole-proprietor contribution rate.
  3. 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.