A SIMPLE IRA is a retirement plan for small employers that lets employees defer part of their pay while the employer adds a required contribution. The 2026 employee limit is $17,000.
This guide gives the 2026 limits and catch-ups from IRS Notice 2025-67, the employer contribution rules and deadlines from Publication 560 and the 25% early-withdrawal rule, with worked examples.
| Limit | 2025 | 2026 |
|---|---|---|
| Employee salary reduction (general SIMPLE limit) | $16,500 | $17,000 |
| Certain plans with the higher limit | $17,600 | $18,100 |
| Catch-up, age 50 or over | $3,500 | $4,000 |
| Catch-up, age 60 to 63 (attaining 60, 61, 62 or 63 in 2026) | $5,250 | $5,250 |
| Catch-up for certain plans with the higher limit, age 50 or over | $3,850 | $3,850 |
The higher limits apply only to participants in SIMPLE plans of certain employers (Publication 560, citing section 117 of the SECURE 2.0 Act), so check with the plan provider which limit applies to you. The limits come from IRS Notice 2025-67; the 2025 column shows the amounts the notice says were previous or unchanged. The 2025 Publication 560 table lists the employee contribution as up to $16,500, or $20,000 if age 50 or over but not attaining 60, 61, 62 or 63. A 50-year-old with the general limit could therefore defer $17,000 plus $4,000, or $21,000 in 2026, and someone attaining 60 to 63 could defer $17,000 plus $5,250, or $22,250 (our additions).
Publication 560 says the employer contribution is either dollar-for-dollar matching contributions, up to 3% of the employee's compensation, or fixed nonelective contributions of 2% of compensation. Higher matching and fixed nonelective contributions apply for certain employers who allow higher salary reduction contributions. Additional nonelective contributions of a uniform percentage (up to 10% but not exceeding $5,100 for 2025, rising to $5,300 for 2026 under IRS Notice 2025-67) may also be made. The SECURE 2.0 Act permits certain nonelective and matching contributions made after 2022 to be designated as Roth contributions. For example, matching 3% of an $80,000 salary is $2,400, and a 2% nonelective contribution on $60,000 is $1,200 (our arithmetic).
An employer can set up a SIMPLE IRA any time between January 1 and October 1 of the calendar year (or as soon as administratively feasible for a new employer coming into existence after October 1). Salary reduction contributions are due 30 days after the end of the month for which they are made, and matching or nonelective contributions by the due date of the employer's return including extensions.
The Form 5329 instructions say a distribution from a SIMPLE IRA received within two years of first participating in the plan is multiplied by 25% instead of 10% for the additional tax on early distributions. See our early withdrawal penalty guide.
For a self-employed person or small employer, see our solo 401(k) vs SEP-IRA guide and our 401(k) limits guide. The 2027 limits will be published in IRS notices later; see our 2027 limits guide.
IRS: Notice 2025-67, 2026 amounts relating to retirement plans and IRAs, IRS: Publication 560, Retirement Plans for Small Business, IRS: Instructions for Form 5329 (2025).