Free SIMPLE IRA contribution calculator. Calculate employee deferrals and employer match for 2025. Compare 2% non-elective vs 3% matching contributions.
The SIMPLE IRA Contribution Calculator helps small business owners and employees determine their maximum SIMPLE IRA contributions for 2025. SIMPLE IRAs (Savings Incentive Match Plan for Employees) are designed for businesses with 100 or fewer employees, offering a straightforward retirement savings vehicle.
The calculator models both components: the employee salary deferral and the employer contribution (either a 2% non-elective contribution or a dollar-for-dollar match up to 3% of compensation). It includes 2025 limits with age-based catch-up provisions.
Compare your SIMPLE IRA capacity against 401(k) and SEP IRA alternatives to find the best fit for your business size and income level. The SIMPLE IRA gives small businesses with fewer than 100 employees an accessible retirement plan with lower administrative costs than a 401(k). Employee contributions are capped at a lower limit than 401(k) plans, but employer matching or non-elective contributions make it a competitive option for businesses looking to attract and retain talent.
SIMPLE IRAs are the easiest employer-sponsored plan to administer. This calculator helps you maximize contributions and compare the two employer contribution formulas (2% non-elective vs 3% match) to pick the most cost-effective approach. Running the numbers in advance helps you budget for employer contributions and set employee expectations accurately each plan year.
Employee Deferral = min(Salary × Deferral%, $16,500 + catch-up) Catch-Up (50+): $3,500 | Super Catch-Up (60-63): $5,250 3% Match: min(Employee Deferral, Salary × 3%) 2% Non-Elective: Salary × 2% (regardless of employee contribution) Total = Employee Deferral + Employer Contribution
Result: Employee: $16,500 + $3,500 catch-up = $20,000 | Employer: $3,000 (3% match) | Total: $23,000
At age 52 with $100,000 salary and 10% deferral, employee contributes the $16,500 limit plus $3,500 catch-up. The employer matches dollar-for-dollar up to 3% of salary ($3,000). Total annual contribution: $23,000.
Sole proprietors can establish a SIMPLE IRA for themselves. The "salary" is net self-employment income after the self-employment tax deduction. This makes SIMPLE IRAs viable for freelancers and gig workers, though SEP IRAs and Solo 401(k)s often allow higher contributions at similar income levels.
Starting in 2025, SIMPLE IRAs can accept Roth contributions under SECURE 2.0, giving participants the option of after-tax contributions with tax-free growth. Additionally, employers with 25 or fewer employees may offer higher contribution limits (110% of the standard). The super catch-up for ages 60-63 is also new.
SIMPLE IRAs require no annual Form 5500 filing, no discrimination testing, and minimal administration. Each employee opens their own IRA at a financial institution. The employer's only obligation is timely deposits and choosing between the 3% match or 2% non-elective formula each year.
For 2025, the employee deferral limit is $16,500. Those age 50+ can add $3,500 in catch-up contributions. Ages 60-63 get an enhanced super catch-up of $5,250. The employer contributes via either a 3% match or 2% non-elective formula.
The 3% match means the employer matches employee deferrals dollar-for-dollar up to 3% of salary. Employees who don't contribute get nothing. The 2% non-elective means the employer contributes 2% of every eligible employee's salary, regardless of whether they contribute themselves.
A 401(k) allows significantly higher contributions ($23,500 vs $16,500 in 2025) and more design flexibility. However, SIMPLE IRAs are much cheaper and easier to administer — no annual Form 5500 filing, no discrimination testing, and minimal recordkeeping. SIMPLE is ideal for very small businesses.
Yes. SIMPLE IRA contributions don't count toward your Traditional/Roth IRA limit. However, the SIMPLE IRA counts as an employer plan for purposes of determining deductibility of Traditional IRA contributions.
Withdrawals within the first 2 years of participation incur a 25% penalty (instead of the usual 10%). After 2 years, the standard 10% early withdrawal penalty applies for those under 59½. After 59½, withdrawals are penalty-free (but still taxable).
Businesses with 100 or fewer employees who earned at least $5,000 in any 2 prior years and are expected to earn $5,000 in the current year. The employer cannot maintain any other employer-sponsored retirement plan simultaneously.