Answer: Contributions
How much can I contribute to my SEP?
The contributions you make to each employee’s SEP-IRA each year cannot exceed the lesser of:
- 25% of compensation, or
- $66,000 for 2023 ($61,000 for 2022; $58,000 for 2021; $57,000 for 2020 and subject to annual cost-of-living adjustments for later years).
These limits apply to contributions you make for your employees to all defined contribution plans, which includes SEPs. Compensation up to $330,000 in 2023 ($305,000 in 2022; $290,000 in 2021; $285,000 in 2020 and subject to cost-of-living adjustments for later years) of an employee’s compensation may be considered. If you’re self-employed, use a special calculation to determine contributions for yourself.
Contributions must be made in cash; you cannot contribute property.
If you’ve contributed more than the annual limits to your SEP plan, find out how to correct this mistake.
How much can I contribute if I’m self-employed?
The same limits on contributions made to employees’ SEP-IRAs also apply to contributions if you are self-employed. However, special rules apply when figuring the maximum deductible contribution. See Publication 560 for details on determining the contribution amount.