SIMPLE IRA Contribution Calculator 2026: Methodology, Formulas, and Sources

2026 constants used

• Standard employee deferral limit: $17,000
• Applicable SIMPLE plan deferral limit: $18,100
• Standard age-50 catch-up: $4,000
• Applicable-plan age-50 catch-up used in the calculator: $3,850
• Age 60 to 63 catch-up amount: $5,250
• Compensation cap for the 2% nonelective formula: $360,000

Inputs used by the calculator

• Age
• Compensation
• Desired employee salary reduction amount
• Employer formula type: match or 2% nonelective
• Employer match percentage when match is selected
• Whether the plan qualifies for the higher applicable SIMPLE limit

Calculation flow

1. Set the base employee deferral limit depending on whether the plan is standard or applicable SIMPLE.
2. Add the appropriate catch-up amount based on age and plan type.
3. Cap the employee contribution at the lesser of the combined limit or compensation.
4. If the employer formula is match, calculate the employer contribution as the lesser of the employee contribution or compensation multiplied by the match percentage.
5. If the employer formula is 2% nonelective, calculate 2% of compensation up to the compensation cap.
6. Add the employee and employer amounts to produce the total contribution estimate.

Why the plan-type toggle exists

The higher applicable SIMPLE plan rules can change the base employee limit and the age-50 catch-up amount. Rather than hide that difference behind one number, the calculator lets the user choose which plan type applies. That keeps the output readable while still reflecting the newer SECURE 2.0-style distinctions.

Assumptions and exclusions

• The tool is a planning calculator, not a replacement for payroll setup or plan-document review.
• It assumes the entered age is the relevant age for 2026 catch-up treatment.
• The calculator simplifies applicable SIMPLE determination to a user choice.
• Payroll timing, correction procedures, and plan-specific restrictions are outside scope.

Primary sources

• IRS Notice 2025-67
• IRS SIMPLE IRA plan guidance
• IRS retirement limit announcements for 2026

Related pages: calculator and guide.

Update policy

We update this methodology when the IRS publishes new SIMPLE IRA deferral limits, catch-up amounts, compensation caps, or guidance affecting the higher applicable SIMPLE rules. We also revise the page if published instructions or plan guidance clarify how a calculator should present the difference between match and nonelective contribution structures.

Scope note

This calculator aims to explain the major moving parts clearly: the employee limit, the age-based catch-up treatment, and the employer contribution method. It does not attempt to reproduce every payroll or plan-administration nuance. That narrower scope is intentional so the calculator remains understandable while still staying anchored to the official 2026 limits.