Key takeaways

• Eligible employees can generally contribute up to $17,000 to a SIMPLE IRA in 2026, or up to $18,100 in certain situations.
• Employees age 50 to 59 and 64+ can make an extra $4,000 in catch-up contributions, while those 60 to 63 can add $5,250— if offered through their plan.
• Employers have the option of either matching employee deferrals up to 3% (or 4% in some plans) in 2026, or making a set, nonelective contribution based on a percentage of the employee’s annual pay.

Saving for retirement through a SIMPLE IRA could be even more rewarding in 2026. Designed for small business workers and self-employed individuals, a SIMPLE (Savings Incentive Match Plan for Employees) IRA lets both employers and employees contribute to a tax-advantaged retirement account. The IRS bumped contribution limits for 2026, allowing employees to save up to $17,000 — or $18,100 in certain eligible plans — with additional catch-up opportunities available for older workers.

SIMPLE IRAs are generally offered by small businesses with 100 or fewer employees that do not provide any other type of retirement plan. Employers make contributions using their own funds, and employees may also contribute through salary deductions and eligible catch-up contributions.

SIMPLE IRA contribution limits in 2026

There are separate SIMPLE IRA contribution limits for employee and employer contributions. These are the only types of contributions that can be made to an employee’s SIMPLE IRA.¹ Both employer and employee contributions are always 100% vested, meaning employees have complete ownership of their account funds.²

Employee contribution limits and catch-ups in 2026

Employees can contribute up to $17,000 of their salary in 2026 (subject to cost-of-living adjustments). ³ The limit increases to $18,100 for companies with 25 or fewer employees who received at least $5,000 of compensation during any prior two years.⁴ An employee can still participate in other workplace retirement plans, such as 401(k)s, in addition to their SIMPLE IRA. In this situation, the most an employee can contribute across all plans is $24,500 in 2026 (subject to cost-of-living adjustments).⁵

Several catch-up provisions in 2026 may boost the amount that employees can contribute each year to their SIMPLE IRAs. Depending on the plan, employees ages 50 to 59 (and ages 64 and older) can make a $4,000 catch-up contribution. Under the SECURE 2.0 Act, employees ages 60 to 63 can instead make a super catch-up contribution of $5,250, depending on their plan. Annual catch-up contributions must be deposited into an employee’s SIMPLE IRA by the end of the calendar year.⁶

Through a salary reduction agreement, employees decide how much to deduct from their paychecks. These pre-tax deductions lower an employee’s taxable income and are directly contributed to their SIMPLE IRA. Employees can also change their contribution amounts during the 60-day election period each year, typically between November 2 and December 31. They may also stop their salary reductions at any point but may need to wait until the election period to restart them.⁷

Employer contributions to SIMPLE IRAs in 2026

Employer contributions to SIMPLE IRAs have a separate limit that can help employees save even more for retirement. Each employer is responsible for depositing its contributions into employees’ accounts by the federal tax return deadline, including extensions.

Employers make contributions in either of the following ways:⁸

• Employer matching: Match an employee’s own contributions, dollar-for-dollar, up to 3% of the employee’s salary. Depending on the company, this limit increases to 4% for employers with 26 to 100 employees. Employers that contribute less than the maximum amount can only do so for two out of five years and must contribute at least 1%. Employees can also check to see whether their employer offers matching for qualified student loan payments (QSLPs).⁹
• Nonelective contributions: Contribute 2% of the employee’s compensation, up to $360,000 for 2026 (subject to cost-of-living adjustments).¹⁰ This percentage rises to 3% for companies with 26 to 100 employees. The full amount must be contributed regardless of whether the employee makes their own contributions. Employers can choose to contribute an additional 10% of an employee’s salary, capped at $5,300 in 2026.¹¹

If an employer decides to match less than 3% of employees’ contributions or chooses the 2% nonelective formula, then they must notify employees within a reasonable period before the 60-day election period.

The IRS also states that employee salary-reduction contributions must generally be deposited within 30 days after the end of the month, while employer contributions are due by the employer’s federal tax return deadline, including extensions.¹²

Read more: What is a vesting period?

Making the most of your SIMPLE IRA contributions

Contributing to a SIMPLE IRA is one way for employees to build the savings they need to retire. They can maximize the amount put into these tax-advantaged plans by:

• Taking advantage of employer matching: Employers match up to a certain percentage, resulting in additional contributions to employees’ SIMPLE IRAs.
• Making the most of catch-up contributions when applicable: Employees ages 50 or older can confirm that catch-up contributions are enabled. If so, they must make these contributions by December 31.¹³
• Contributing to more than one IRA: Employees can contribute to their own personal IRAs as well, which have a separate contribution limit of $7,500 (plus catch-up contributions) in 2026.
• Annually updating salary reduction agreements: Each year, the IRS updates the annual contribution limits. Employees may be able to raise payroll contributions to take advantage of these increased amounts.
• Asking about additional account features: Certain plans offer the ability to make Roth contributions or additional nonelective contributions. Employees can inquire about these features as well as any student loan matching or additional midyear election periods.

FAQs

Who is eligible to participate in a SIMPLE IRA?

As a small-business employee, to be eligible to participate in a SIMPLE IRA, you must:¹⁴

• Have earned at least $5,000 during any two years before the current year
• Expect to earn at least $5,000 during the current year

Can I contribute to a SIMPLE IRA and a 401(k) in the same year?

Yes, employees may contribute to a SIMPLE IRA and a 401(k) in the same year. Keep in mind that the employee salary deferral limit across both plans is $24,500 in 2026.¹⁵ Workers ages 50 or older may qualify for additional catch-up contributions, but age- and plan-specific limits apply, so it is important to track contributions across both accounts.

What is the SIMPLE IRA contribution deadline?

Catch-up contributions must be made by December 31, while salary reduction contributions are taken throughout the year from each paycheck. Employers must deposit these funds into an employee’s SIMPLE IRA within 30 days after the end of the month in which the employee would otherwise have received the money. Many SIMPLE IRAs are also subject to the 7-day safe harbor rule outlined by the Department of Labor. When applicable, employers instead have seven days to deposit employees’ salary deferrals into the account.

Employer matching and nonelective contributions must be deposited by the employer’s federal income tax return deadline, including extensions. Self-employed individuals may have until January 30 to deposit their salary-reduction contributions for the prior year.¹⁶