SIMPLE IRA Calculator
Your pay, your deferral and the plan's statutory figures
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Long-range scenario, not a guarantee. Small changes in returns, inflation, fees, taxes, and withdrawal timing can materially change the result.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your annual pay from this employer. Both employer elections are percentages of it, so neither can be sized until it is there.
- 02
Enter what you plan to defer this year. The cap is $17,000, or $18,100 where the employer has 25 or fewer employees, plus the catch-up your age allows — and it can never exceed your pay.
- 03
Enter your age, then the number of years since your first contribution to this SIMPLE. The age field steps by half a year on purpose: 59.5 is a real entry, because the early-withdrawal penalty switches off at 59½ and a 59-year-old and a 59½-year-old get different answers.
- 04
Enter the amount you would take out early if you had to, and your marginal federal rate. Leaving the withdrawal at zero simply switches that half of the page off.
- 05
Check the statutory block — the two deferral limits, the two catch-up figures, the 3% match and 2% flat contribution, and the 25% and 10% penalty rates — then read the headline. It is a range rather than a single figure because the employer, not you, picks which election the plan runs on; the table underneath shows what each pays at every deferral level.
Formula
Your deferral cap = the deferral limit ($17,000, or $18,100 where the employer has 25 or fewer employees or has 26 to 100 and elected it) plus the catch-up your age allows — $4,000 from 50, $5,250 in place of it from 60 to 63, $4,000 again from 64 — and it can never exceed your pay. Under the matching election, employer money = the lesser of your deferral and 3% of your pay. Under the nonelective election, employer money = 2% of your pay counted up to the $360,000 compensation limit, paid whether or not you defer; the match is not limited by that compensation figure and the flat contribution is. The two elections are equal at a deferral of exactly the flat percentage of pay — below it the flat contribution pays more, above it the match does. On a withdrawal before 59½: penalty = the amount × 25% while you are inside the first two years of participation and × 10% after that, plus ordinary income tax at your marginal rate. From 59½ the penalty is zero at either rate, because the two-year rule substitutes one penalty for another rather than creating one where the age exception has already removed it.
Example
Enter $70,000 of pay, a $6,000 deferral, one year in the plan, a $10,000 withdrawal and a 22% marginal rate. Your $6,000 is 8.6% of pay, comfortably under the $17,000 cap, leaving $11,000 of room. The match pays a dollar for a dollar up to 3% of $70,000, which is $2,100, and your deferral clears that ceiling, so the match pays the whole $2,100; the flat election pays 2% of $70,000 — $1,400 — regardless. The headline is therefore a range: $7,400 into the account under the flat contribution, $8,100 under the match. The crossover sits at $1,400, a deferral of exactly 2% of pay. Now the withdrawal. One year in, you are inside the two-year window, so $10,000 costs $2,500 of penalty rather than $1,000 — $1,500 extra — plus $2,200 of income tax, leaving $5,300. Change years in the plan to 3 and the penalty falls to $1,000 and you keep $6,800. Put 59.5 in the age field and the penalty disappears at either rate: the same $10,000 costs $2,200 of income tax and nothing else.
Definitions
- Nonelective contribution
- The flat 2% of pay an employer may elect instead of matching. It arrives whether or not the employee defers anything, and it counts pay only up to the $360,000 compensation limit — a cap the match does not have.
- Two-year period
- The first two years of an employee's participation in a SIMPLE, measured from the date of the first contribution and per employer. Inside it the early-withdrawal penalty is 25% and the account can only be rolled to another SIMPLE IRA.
- Elective deferral
- Money you choose to have taken out of your pay. A SIMPLE has its own $17,000 cap, but every elective deferral you make anywhere shares one personal annual limit, and that shared limit is the 401(k) figure of $24,500.
Good to know
The plan built to be cheap to run
A SIMPLE IRA is what the acronym says: a Savings Incentive Match Plan for Employees, designed for a business with 100 or fewer employees that wants to offer a retirement plan without paying for a 401(k). What it buys the employer is the absence of things — no nondiscrimination testing, no top-heavy testing, no annual Form 5500, no plan administrator, and no vesting schedule to track, because every dollar is fully vested the instant it lands. What it costs the employer is the one thing a 401(k) can avoid: the employer contribution is mandatory every single year, whether or not the business had a good one. That trade is the whole design, and it explains most of the plan's other rules. Eligibility is generous by statute and can be made more so. An employee must be let in if they earned at least $5,000 from you in any two preceding calendar years and are reasonably expected to earn $5,000 this year; the employer may lower either test, including to zero, but may not raise them. The 100-employee ceiling counts anyone who earned $5,000 or more in the preceding year, and a business that grows through it gets a two-year grace period rather than an immediate problem. The plan must generally be set up by 1 October of the year it first covers, unless the business itself is newer than that. Money moves on a tight schedule: employee deferrals have to be deposited by the 30th day after the month they were withheld, and the employer's own contribution is due by the business's filing deadline including extensions. Two limits define the shape of the account for the employee. The first is the deferral cap, $17,000 for 2026 or $18,100 at a smaller employer, plus a catch-up from 50. The second is that a SIMPLE IRA is an IRA: there are no plan loans, because IRAs cannot lend, and the balance sits in the same pro-rata pot as every other traditional and SEP IRA you own for the purposes of a Roth conversion. It also does not touch your own IRA limit — the $7,500 you may put into a traditional or Roth IRA, $8,600 from 50, is entirely separate from everything the plan does.
The employer's election, and the point where the two cross
Every year the employer picks one of exactly two formulas for the whole plan, and the choice is not the employee's to make. The first is a match: a dollar for every dollar you defer, up to 3% of your pay. The second is a nonelective contribution: a flat 2% of your pay, paid whether or not you defer a cent. Both are mandatory once elected, and the employer has to tell every eligible employee which one is running during a 60-day election window before the year begins — in practice November and December. That notice is where the real answer lives, which is why this page computes both and reports a range rather than pretending to know. Which one is better for you depends entirely on how much you defer, and the crossover point is exactly the nonelective percentage of your pay. On $70,000 of pay, a deferral of $1,400 — 2% — makes the two identical at $1,400 of employer money. Below that the flat contribution wins, because it arrives regardless; above it the match wins, up to its own ceiling of 3% of pay, which on $70,000 is $2,100. Defer $6,000 and the match pays the whole $2,100 against the flat election's $1,400, so the total landing in the account is $8,100 under the match and $7,400 under the flat contribution. Defer nothing at all and the divergence is total: the match pays zero, and the flat 2% still pays $1,400. That last case is the one employers actually think about. A business whose staff largely do not participate can elect the match and spend almost nothing; a business that wants everyone covered elects the flat 2% and pays for all of them. There is a third figure hiding in the difference, and it matters to a high earner. The flat contribution counts pay only up to the $360,000 compensation limit, so it can never exceed $7,200. The match is not capped by that limit at all — it is bounded only by your deferral and by 3% of your actual pay. The employer also keeps one escape hatch, but only on the matching side: a matching plan may cut the match to as little as 1% of pay in two years out of any five, with notice. The flat election cannot be reduced at all. Where the employer has taken the higher $18,100 deferral limit, both of their own percentages rise with it — a 4% match or a 3% flat contribution — so the larger limit is never free to the business.
The 25% penalty and the two-year clock
This is the rule that makes a SIMPLE IRA different from every other retirement account in the code, and the one most likely to cost a reader real money. IRC 72(t)(6) substitutes a 25% early-withdrawal penalty for the ordinary 10% during the first two years of an employee's participation. On a $10,000 withdrawal in year one that is $2,500 rather than $1,000 — $1,500 of pure penalty premium — plus $2,200 of income tax at a 22% marginal rate, leaving $5,300 of the original $10,000. Take the same $10,000 three years in and the penalty is $1,000 and you keep $6,800. Two details about the clock. It runs from the date of your first contribution to that SIMPLE, not from 1 January and not from your hire date, so somebody who joined in October is still inside the window well into their third calendar year. And it is measured per employer: changing jobs and joining a new SIMPLE starts a fresh two years, however long you were in the old one. The rule does not override the age exception, and getting that backwards is the error worth guarding against. From 59½ there is no early-withdrawal penalty at any rate — not 25%, not 10% — because the two-year rule substitutes one penalty for another rather than creating one where the age exception has already removed it. Telling a 62-year-old in a new SIMPLE that they owe 25% would be exactly wrong. Put 59.5 into the age field and the same $10,000 costs $2,200 of income tax and nothing else. Every other 72(t) exception reaches a SIMPLE IRA the way it reaches any IRA: disability, death, substantially equal periodic payments, a first home, higher education, unreimbursed medical expenses above the floor, health insurance premiums after twelve weeks of unemployment. Any of them takes the penalty to zero and none of them touches the income tax. Where the two-year rule does its worst damage is not withdrawals at all — it is rollovers, because nobody expects a rollover to be taxable. Inside the window a SIMPLE IRA can move only to another SIMPLE IRA. Sending it to a traditional IRA or a new employer's 401(k) is not a rollover in the eyes of the code; it is a distribution, taxed as ordinary income and penalised at 25%. People leave a job, tidy up their old accounts in the same afternoon, and meet the bill the following April. Once the two years are up the balance goes anywhere an IRA can go. Waiting is free.
Two caps, small catch-ups, and when a business outgrows it
There are two deferral limits and which one applies to you is decided by your employer's size rather than by anything you do. A business with 25 or fewer employees gets the higher $18,100 limit automatically. A business with 26 to 100 employees runs on $17,000 unless it elects the higher figure — and if it does, it must also raise its own contribution to a 4% match or a 3% flat contribution, which is why plenty of employers in that range do not. On top of whichever applies, the catch-up is $4,000 from age 50, or $5,250 for the four years from 60 to 63, the larger figure replacing the smaller rather than adding to it and reverting at 64. So a 55-year-old's cap is $21,000, or $22,100 at a smaller employer, and neither can exceed actual pay. Notice how far below a 401(k) those catch-ups sit: $4,000 against $8,000 at the same age. That gap is one of the strongest arguments for a small employer moving to a 401(k) once there is budget for one. There is also a shared limit that catches people with two jobs. Elective deferrals across every plan you are in share one personal annual limit, and it is the 401(k) figure of $24,500, not the SIMPLE's $17,000. Defer $6,000 here and you have $18,500 of room in the other plan, not a fresh $24,500. Neither plan will warn you; the excess is yours to notice and yours to have returned before the April deadline, or the same money is taxed twice. Two rules describe when a business has to move on. An employer running a SIMPLE may not maintain another qualified plan for the same year, so a growing business cannot layer a 401(k) on top — it has to switch. SECURE 2.0 made that switch practical by permitting a mid-year termination of a SIMPLE and replacement with a safe-harbor 401(k), with the year's deferral limits prorated between the two; before that the business had to wait for 1 January. Two smaller SECURE 2.0 provisions are worth asking about: an employer may make an additional uniform nonelective contribution of up to 10% of compensation, capped at $5,000, on top of the mandatory election, and a SIMPLE may now offer designated Roth contributions — permitted by statute, though custodian support remains patchy enough that the answer is worth confirming rather than assuming.
Frequently asked questions
How much can I put into a SIMPLE IRA in 2026?
$17,000 of your own, or $18,100 if your employer has 25 or fewer employees — that higher figure is automatic for those employers, and available to one with 26 to 100 employees only if it elects it. On top of that, a catch-up of $4,000 from age 50, or $5,250 for the four years from 60 to 63, which replaces the $4,000 rather than adding to it and reverts at 64. A 55-year-old's cap is therefore $21,000, or $22,100 at one of those smaller employers, and neither can exceed actual pay. Whatever you defer, the employer's own contribution arrives as well, and it is mandatory every year.
Why is the answer a range rather than one number?
Because the employer chooses between two elections and you may not have been told which one yet. Either they match you dollar for dollar up to 3% of your pay, or they pay a flat 2% of your pay whether or not you defer a cent. The page computes both. On $70,000 of pay with a $6,000 deferral, the match pays $2,100 and the flat contribution pays $1,400 — so the total landing in the account is $7,400 under one election and $8,100 under the other. The plan's annual notice, sent during a 60-day window before the year begins, is where the actual answer is.
Which election is better for me?
It depends entirely on how much you defer, and the crossover is exactly the flat percentage of your pay. On $70,000, a deferral of $1,400 — 2% of pay — makes the two identical. Defer less and the flat contribution is worth more, because it arrives regardless; defer more and the match pulls ahead, up to its own ceiling of $2,100. At a deferral of zero the difference is total: the match pays nothing and the flat contribution still pays $1,400. Employers who know most of their staff will not participate tend to elect the match for that reason, and employers who want everyone covered elect the flat 2%.
Is the early-withdrawal penalty really 25%?
For the first two years of your participation, yes — IRC 72(t)(6) substitutes 25% for the ordinary 10%, and a SIMPLE IRA is the only account in the code where that happens. On a $10,000 withdrawal in year one that is $2,500 rather than $1,000, $1,500 of pure penalty premium, plus $2,200 of income tax at 22%, leaving $5,300 of the $10,000. Three years in, the same withdrawal costs $1,000 of penalty and you keep $6,800. The clock runs from the date of your first contribution, not from January, and it is measured per employer — a new job and a new SIMPLE starts a new two years.
Can I roll a SIMPLE IRA into a traditional IRA or my new employer's 401(k)?
Not inside the first two years, and this is where the rule does real damage. During that window a SIMPLE IRA can only move to another SIMPLE IRA. Sending it to a traditional IRA or a 401(k) is not a rollover at all in the eyes of the code — it is a distribution, taxed as ordinary income and penalised at 25%. People change jobs, tidy up their old accounts, and discover the bill the following April. Once the two years are up the balance rolls anywhere an IRA can go, so the fix is simply to wait, and waiting is free.
I also defer into a 401(k) at another job. Do the two limits add up?
No. Elective deferrals share one personal limit for the year across every plan you are in, and it is the 401(k) figure of $24,500, not the SIMPLE's $17,000. Deferring $6,000 into this SIMPLE leaves $18,500 of room in the other plan, not a fresh $24,500. The plans do not talk to each other and neither will stop you overshooting — noticing it is yours, and so is asking for the excess to be returned before the April deadline. Miss that and the same money is taxed in the year it went in and again when it comes out. Your own IRA limit is separate and untouched: $7,500, or $8,600 from 50, on top of everything here.