How much can you contribute to a SIMPLE IRA? Find your 2025 employee deferral limit, catch-up amount (age 50+), and employer match contribution — then project how your SIMPLE IRA will grow over time.
Know exactly how much you can defer ($16,000) and how much your employer must contribute.
Compare both employer match options side by side and see the impact on your total.
Project your SIMPLE IRA balance year by year with monthly compounding.
See how the $3,500 age-50+ catch-up boosts your savings in the years before retirement.
A SIMPLE IRA (Savings Incentive Match Plan for Employees of Small Employers) is a retirement plan available to businesses with 100 or fewer employees. It is designed to be low-cost and easy to administer while still giving employees a way to save for retirement through payroll deductions.
Unlike a SEP IRA — where only the employer contributes — a SIMPLE IRA has two funding sources:
Employers must pick one of the following each year:
Employer matching is calculated on compensation up to the 2025 limit of $345,000, so the most an employer can add is $10,350 (3% match) or $6,900 (2% nonelective). Employers may reduce the 3% match to as low as 1% in two out of every five years, with proper notice.
Employees are eligible once they have earned at least $5,000 in any two prior calendar years and are expected to earn $5,000 in the current year. Contributions are immediately 100% vested. Early withdrawals are subject to income tax plus a penalty — 25% if taken within the first two years of your first participation in the plan, or 10% after that.
| Year | Employee Deferral | Catch-Up (Age 50+) | Compensation Limit | Max Employer Contribution |
|---|---|---|---|---|
| 2025 | $16,000 | $3,500 | $345,000 | 3% × $345,000 = $10,350 (or 2% = $6,900) |
| 2024 | $16,000 | $3,500 | $345,000 | 3% × $345,000 = $10,350 (or 2% = $6,900) |
| 2023 | $15,500 | $3,500 | $330,000 | 3% × $330,000 = $9,900 (or 2% = $6,600) |
Your employee deferral is also capped at 100% of your compensation. The deferral limit and catch-up fields in the calculator are editable, so you can update them if the IRS adjusts the limits in future years.
| Feature | SIMPLE IRA | 401(k) | SEP IRA |
|---|---|---|---|
| Best for | Small businesses (≤100 employees) | Businesses of any size | Self-employed & small businesses |
| Employee deferrals | Yes — up to $16,000 (2025) | Yes — up to $23,500 (2025) | No — employer only |
| Catch-up (50+) | $3,500 | $7,500 | Not applicable |
| Employer contribution | Required — 3% match or 2% nonelective | Optional — up to 25% of compensation | Discretionary — up to 25% of compensation |
| Combined limit | Deferral + employer match | Up to $70,000 (2025) | Up to $70,000 (2025) |
| Vesting | Immediate | May have vesting schedule | Immediate |
| Administrative cost | Low | Higher (testing, filings) | Low |
If you run a small business and want low cost and simple administration, a SIMPLE IRA is often the best fit. If you want higher contribution limits and more flexibility (including Roth options and loans), a 401(k) may be worth the extra cost. If you are self-employed with no employees, a SEP IRA lets you set aside up to $70,000 per year — far more than a SIMPLE IRA allows.