Is a SEP or Simple IRA right for you?

• Matching or non-elective contributions: Due date of employer's return, including extensions
• Salary reduction contributions: 30 days after the end of the month for which the contributions are to be made

A contribution to a Simple IRA is as follows:

• Employee Contribution: Employers can elect to either match the employee’s salary reduction contributions dollar-for-dollar up to 3% of pay or pay a 2% non-elective contribution for each eligible employee, regardless of whether the employee contributes to their SIMPLE IRA. Employers can switch between these options each year provided certain requirements are met. **Beginning in 2024, employers with 26 to 100 employees who allow for the increased salary deferral and catch-up limits (see below) must make a 4% dollar-for-dollar match or a 3% non-elective contribution.
• Employer Contribution: Employees can elect to contribute up to 100% of compensation up to a maximum of $16,500 in 2025 ($16,000 in 2024)** through salary reduction and, for those age 50 and older, an additional $3,500 (for 2024 and 2025).*** **Beginning in 2024, employers with 25 or fewer employees who earned at least $5,000 in compensation during the previous year must allow an employee salary deferral contribution limit of $17,600 (for 2024 and 2025) plus an additional catch-up contribution of $3,850 (for 2024 and 2025). Employers with 26 to 100 employees who earned at least $5,000 in compensation during the previous year can choose whether they wish to allow for the increased deferral and catch-up limits. If the increased limits are permitted, the employer must notify all eligible employees (by a certain deadline) and document the increase, accordingly. ***Beginning in 2025, employees who turn 60, 61, 62, or 63 during the year are permitted to an increased catch-up contribution of $5,250.