About the SIMPLE IRA Calculator
This SIMPLE IRA calculator shows how much goes into your Savings Incentive Match Plan for Employees each year and what it could grow to. Enter your salary, the percentage you defer and your age, then choose how your employer contributes: a dollar-for-dollar match on up to 3% of pay, or a 2% nonelective contribution that every eligible employee receives whether or not they defer.
SIMPLE IRAs are common at small businesses with 100 or fewer employees, so the calculator is useful for employees deciding how much to defer and for owners estimating the cost of the plan. For 2026 the standard deferral limit is $17,000, with a $4,000 catch-up at age 50+ and a $5,250 catch-up at ages 60–63. Plans of employers with 25 or fewer employees — and plans of employers with 26–100 employees that elect it and pay a 4% match or 3% nonelective contribution — use a higher $18,100 limit with a $3,850 age-50 catch-up. The IRS publishes a single $5,250 figure for the ages 60–63 catch-up in SIMPLE plans, so the calculator uses it for both plan types. All limits are editable.
The projection keeps your salary and contributions level and adds them at the end of each year, compounding at your expected return. Remember that withdrawals within two years of first joining a SIMPLE IRA carry a 25% penalty instead of the usual 10% if you are under 59½.
With the default inputs, the total annual contribution is $5,400.00. Change any value above to recalculate instantly.
How to use the simple ira calculator
- 1Enter your salary, deferral percentage and age.
- 2Choose whether your employer matches or makes a 2% nonelective contribution.
- 3Add your current balance, expected return and years to project.
- 4Check the total annual contribution and whether you capture the full match.
- 5Pick the higher plan limit if your employer has 25 or fewer employees or has elected it.
Formula and method
Your salary deferral is the percentage you elect times your pay, capped at the SIMPLE IRA limit plus any catch-up for your age: $17,000 + $4,000 (age 50+) in a standard plan, or $18,100 + $3,850 in a higher-limit plan, and $5,250 instead of either age-50 amount at ages 60–63. With the matching formula, the employer matches your deferral dollar for dollar up to m% of pay (normally 3%, or 4% in a higher-limit plan of an employer with 26–100 employees); the matching contribution is not limited by the compensation cap. With the nonelective formula, the employer contributes 2% of pay (3% for those 26–100 employee higher-limit plans), counting no more than $360,000 of compensation, whether or not you defer.
The projection assumes the same total contribution every year, added at year end, with annual compounding at the expected return. Deferrals reduce federal income tax at your marginal rate but are still subject to Social Security and Medicare tax.
- d
- Deferral percentage
- m
- Employer match limit (1%–3% of pay, up to 4% in some higher-limit plans)
- r
- Expected annual return
- n
- Years projected
Worked examples
$60,000 salary, 6% deferral, 3% match
Deferring 6% of $60,000 puts in $3,600, and the employer matches up to 3% of pay, $1,800, for $5,400 a year. At a 22% rate the deferral saves $792 in income tax, and 20 years at 6% grows the contributions to about $198,640.
Age 55 maxing out with catch-up
25% of $90,000 would be $22,500, but at 55 your cap is $17,000 + $4,000 = $21,000. The 3% match adds $2,700. Starting from $50,000, ten years of $23,700 contributions at 6% grow to about $401,930.
2% nonelective contribution with no deferral
With the nonelective formula, the employer contributes 2% of pay for every eligible employee — $800 on a $40,000 salary — even if the employee defers nothing.
Higher-limit plan at a 10-person company, age 55
Employers with 25 or fewer employees use the higher 2026 limit of $18,100 plus a $3,850 age-50 catch-up, so the cap is $21,950 rather than $21,000. 25% of $100,000 would be $25,000, so the deferral is capped at $21,950; the 3% match adds $3,000 for a $24,950 total, and the deferral saves $4,829 at a 22% rate.
Frequently asked questions
What is the SIMPLE IRA contribution limit for 2026?+
Employees can defer up to $17,000 in 2026. Those 50 or older can add a $4,000 catch-up, and those aged 60–63 a $5,250 catch-up. Plans of employers with 25 or fewer employees use a higher $18,100 limit with a $3,850 age-50 catch-up, and employers with 26–100 employees can elect that higher limit if they pay a 4% match or 3% nonelective contribution.
How does the SIMPLE IRA employer match work?+
The employer either matches employee deferrals dollar for dollar up to 3% of pay, or contributes 2% of pay for every eligible employee. The match can be reduced to as low as 1% in no more than two out of every five years. Since 2024 an employer may also add a uniform extra nonelective contribution of up to 10% of pay, capped at $5,300 per employee for 2026 (not modelled here).
Can I contribute to a SIMPLE IRA and a 401(k)?+
Yes, if they are with different employers, but your SIMPLE deferrals and 401(k), 403(b) and other elective deferrals share the overall elective deferral limit. An employer cannot maintain a SIMPLE IRA and a 401(k) at the same time.
What is the SIMPLE IRA early withdrawal penalty?+
Withdrawals before age 59½ normally incur a 10% additional tax, but it rises to 25% if taken within two years of first participating in the employer’s SIMPLE IRA plan. Rollovers are also restricted during those two years.
Is a SIMPLE IRA better than a SEP IRA?+
A SIMPLE IRA lets employees defer their own salary and requires only a modest employer contribution, which suits small teams. A SEP IRA is funded only by the employer, allows much higher contributions for the owner, and requires the same percentage for all eligible employees.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.