SEP IRA Calculator
A SEP IRA is a powerful retirement plan for self-employed people and small business owners that allows far higher contributions than a standard IRA, making it one of the most valuable tax-advantaged accounts available to entrepreneurs, freelancers, and independent contractors. You can contribute up to 25% of your compensation (capped at $70,000 for 2026), and the contributions are tax-deductible, lowering your current tax bill while the money grows tax-deferred until withdrawal. This calculator estimates your maximum contribution based on your net self-employment income and projects your balance over time at your expected return. Enter your net self-employment income, current SEP IRA balance, expected annual return, and years to withdrawal, and the calculator returns your maximum contribution and projected balance. The high contribution limit is the SEP's main advantage: a self-employed person earning $150,000 can potentially shelter tens of thousands per year, far more than the $7,000 limit on a standard IRA, which is why the SEP is a favorite of successful freelancers and small business owners. Anyone with self-employment income can open one — sole proprietors, LLCs, S-corp owners, freelancers, and gig workers — and you can also set one up for your employees, though if you do, you must contribute for all eligible employees on the same percentage basis as for yourself. Contributions are deductible from your taxable income, lowering your tax bill now, and withdrawals in retirement are taxed as ordinary income. If you have no employees, a SEP IRA is simple to set up and maintain; a Solo 401(k) may allow even higher contributions for a solo earner, so compare the two if you're self-employed. This calculator helps you see the contribution limit for your income, project your balance, and plan how much to contribute each year to maximize the tax benefit.
SEP IRA Calculator
Estimate your SEP IRA contribution limit and projected tax-deferred growth.
Max annual contribution
$30,000
25% of income, capped
Projected balance
$1,345,955
After 20 years
Tax-deferred growth
$715,955
A SEP IRA lets self-employed people contribute up to 25% of compensation (capped at $70,000 for 2026). Contributions are tax-deductible and grow tax-deferred until withdrawal.
How to Use This Calculator
- 1Enter your net self-employment income.
- 2Enter your current SEP IRA balance.
- 3Enter your expected annual return.
- 4Enter the years until withdrawal.
- 5Read your max contribution and projected balance.
Why It Helps
- ✓Shows the high contribution limit for self-employed.
- ✓Projects tax-deferred growth over decades.
- ✓Helps reduce current taxable income.
- ✓Useful for freelancers and small business owners.
About This Calculator
A SEP IRA is a powerful retirement plan for self-employed people and small business owners that allows far higher contributions than a standard IRA, making it one of the most valuable tax-advantaged accounts available to entrepreneurs, freelancers, and independent contractors. You can contribute up to 25% of your compensation (capped at $70,000 for 2026), and the contributions are tax-deductible, lowering your current tax bill while the money grows tax-deferred until withdrawal. This calculator estimates your maximum contribution based on your net self-employment income and projects your balance over time at your expected return. Enter your net self-employment income, current SEP IRA balance, expected annual return, and years to withdrawal, and the calculator returns your maximum contribution and projected balance. The high contribution limit is the SEP's main advantage: a self-employed person earning $150,000 can potentially shelter tens of thousands per year, far more than the $7,000 limit on a standard IRA, which is why the SEP is a favorite of successful freelancers and small business owners. Anyone with self-employment income can open one — sole proprietors, LLCs, S-corp owners, freelancers, and gig workers — and you can also set one up for your employees, though if you do, you must contribute for all eligible employees on the same percentage basis as for yourself. Contributions are deductible from your taxable income, lowering your tax bill now, and withdrawals in retirement are taxed as ordinary income. If you have no employees, a SEP IRA is simple to set up and maintain; a Solo 401(k) may allow even higher contributions for a solo earner, so compare the two if you're self-employed. This calculator helps you see the contribution limit for your income, project your balance, and plan how much to contribute each year to maximize the tax benefit.
Disclaimer: This calculator provides estimates for educational purposes only and does not constitute financial, tax, or investment advice. Results depend on assumptions that may not reflect your actual situation.
Frequently Asked Questions
What is the 2026 SEP IRA contribution limit?
Up to 25% of your compensation, capped at $70,000. The exact limit depends on how you calculate self-employment net earnings.
Who can open a SEP IRA?
Self-employed individuals, freelancers, and small business owners — including sole proprietors, LLCs, and S-corp owners. You can also set one up for employees.
Are SEP IRA contributions tax-deductible?
Yes. Contributions are deducted from your taxable income, lowering your tax bill now. Withdrawals in retirement are taxed as ordinary income.
Can I have a SEP IRA and a 401(k)?
Yes, but combined contribution limits apply. A solo 401(k) often allows higher contributions for self-employed people than a SEP IRA.
Do I need employees to open a SEP IRA?
No. If you have no employees, a SEP IRA is simple to set up. If you have eligible employees, you must contribute for them too.
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Written by
James MitchellSenior Financial Analyst & Personal Finance Expert
Certified Financial Planner (CFP) • MBA in Finance, University of Chicago Booth School of Business