1. Your business
Net profit is your Schedule C net profit (or a single-member LLC's equivalent), before this retirement contribution — not gross revenue.
Enter your net profit, then click Calculate.
Result
What this does not cover
- Sole proprietor / single-member LLC only. This applies the net-self-employment-earnings formula for a Schedule C filer. An S-corp or partnership uses a different formula (W-2 wages or a K-1 allocation) and this tool does not compute it.
- Employees change the math. If you have eligible employees, a SEP-IRA must give each of them the same percentage of pay that you give yourself. This tool does not model that.
- Not a Schedule SE substitute. This ignores the additional 0.9% Medicare surtax above $200,000/$250,000 and does not account for multiple businesses or controlled-group rules.
- Point-in-time 2026 figures. These limits are re-indexed annually; confirm the current year's figures before relying on this in a later year.
Common questions
What is the 2026 SEP-IRA contribution limit?
The lesser of 25% of eligible compensation or $72,000. For a self-employed owner, 25% of compensation works out to an effective 20% of net self-employment earnings, and net earnings are capped at the $360,000 compensation limit.
How is a SEP-IRA contribution calculated for a sole proprietor?
Net profit minus half of self-employment tax gives net earnings from self-employment. Multiply by 20%, the self-employed equivalent of the 25% plan rate (25% divided by 1.25), because the contribution is deducted before the earnings it is measured against.
When can I open and fund a SEP-IRA for 2026?
A SEP-IRA can be set up and funded up to your tax filing deadline for the year, including extensions. A Solo 401(k) employee deferral generally requires the plan to be opened by December 31.
Is a SEP-IRA or a Solo 401(k) better for a self-employed person?
On the same earnings a Solo 401(k) usually allows more, because it adds an employee deferral to the same 20% employer share. A SEP-IRA is simpler to set up and never needs an annual Form 5500 filing. The calculator shows both figures side by side.
Is this tax advice?
No. This tool applies published 2026 IRS figures to the numbers you enter, scoped to a sole proprietor or single-member LLC. It does not replace IRS Publication 560 or a qualified tax professional, and an S-corp or partnership uses a different formula.