A SIMPLE IRA calculator helps employees and small business owners estimate annual SIMPLE IRA contributions, including catch-up amounts and employer match. For 2025, the employee elective deferral limit is $16,500 (up from $16,000), with an additional $3,500 catch-up for employees aged 50-59 and 64 or older, and an enhanced $5,250 catch-up for ages 60-63. This tool calculates your total annual contribution, breaks it down by paycheck frequency, and compares the SIMPLE IRA to a SEP-IRA and 401(k).
Financial disclaimer: This calculator provides estimates for planning purposes only and does not constitute tax advice. SIMPLE IRA rules contain exceptions and state-specific variations. Consult a CPA or financial advisor for personalized guidance.
Employee Information
Catch-up available at 50-59, 60-63 (enhanced), and 64+
Enter 100% to contribute the IRS maximum allowed
Employer Match
Employer matches 100% of deferrals up to 3% of compensation
Used to estimate total employer cost
Contribution Breakdown
2025 Retirement Plan Comparison
| Plan | Employee Limit | Catch-Up (50+) | Total Max | Employer Required |
|---|---|---|---|---|
| SIMPLE IRA (2025) | $16,500 | $3,500 | $20,000 | Yes (mandatory) |
| Traditional 401(k) | $23,500 | $7,500 | $31,000 | No (optional) |
| SEP-IRA | N/A | None | $70,000 | Yes (proportional) |
| Traditional IRA | $7,000 | $1,000 | $8,000 | N/A |
Estimated Total Employer Match Cost
Assumes all employees earn the same salary and contribute enough to capture the full employer match. Actual cost will vary.
How to Use the SIMPLE IRA Calculator
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a retirement plan designed specifically for small businesses with 100 or fewer employees. It offers straightforward setup, mandatory employer contributions, and meaningful employee deferral limits. This SIMPLE IRA calculator shows your maximum annual contribution, how it breaks down per paycheck, what your employer is required to contribute, and how the plan compares to a SEP-IRA and 401(k) for your specific situation.
Step 1: Enter Your Salary and Age
Enter your annual salary and current age. Age determines whether catch-up contributions apply. For 2025, employees aged 50-59 and 64 or older may contribute an additional $3,500 catch-up (total: $20,000). Employees aged 60-63 qualify for an enhanced catch-up of $5,250 under SECURE 2.0, bringing their total to $21,750. The calculator automatically applies the correct catch-up amount based on your age.
Step 2: Set Your Contribution Percentage
Enter the percentage of your salary you want to contribute, up to 100% (the calculator caps at the IRS annual limit). Most financial advisors recommend contributing at least enough to capture the full employer match. If your employer matches up to 3% of salary, contributing at least 3% ensures you capture all available free money. Set the percentage to 100% to see the maximum you can contribute under IRS rules.
Step 3: Choose the Employer Match Formula
SIMPLE IRA regulations give employers two mandatory match options. Option 1 is a dollar-for-dollar match up to 3% of compensation — the most common choice. Employers may reduce this to as low as 1% in two out of every five years by providing written notice. Option 2 is a non-elective 2% contribution for every eligible employee, regardless of whether they participate. The 2% option can cost more when employee participation is high, but guarantees contributions even for non-participants. Select the formula your employer uses, or use "custom" to model a different rate.
Step 4: Review Your Results
The results show your annual employee contribution, the employer match amount, the combined total going into your account each year, and the per-paycheck deduction amount based on your pay frequency. The plan comparison table helps you understand how the SIMPLE IRA stacks up against a 401(k), SEP-IRA, and traditional IRA. If you are a business owner evaluating plan options, the total employer match cost estimate shows the full liability for all eligible employees, not just yourself.
SIMPLE IRA vs SEP-IRA vs 401(k)
The SIMPLE IRA is best suited for small businesses with moderate income who want a plan with employee participation and mandatory employer contributions. If maximizing the owner's retirement savings is the priority, a SEP-IRA (up to $70,000) or Solo 401(k) (up to $70,000 combined) allows much higher contributions. If the business has employees, the 401(k) offers higher employee deferral limits ($23,500 vs $16,500) and more flexibility in the employer match formula, but comes with greater administrative complexity and cost. Use this calculator alongside the SEP-IRA Calculator to compare both options for your situation.
FAQ
Is this SIMPLE IRA calculator free?
Yes, completely free with no signup required. All calculations run in your browser — no income or business data is ever sent to a server.
Is my data private?
Absolutely. Everything is computed locally in your browser. No salary, compensation, or business data is stored or transmitted anywhere.
What is the SIMPLE IRA contribution limit for 2025?
For 2025, the SIMPLE IRA employee elective deferral limit is $16,500 (up from $16,000 in 2024). Employees aged 50-59 and 64 or older can contribute an additional $3,500 as a catch-up contribution, for a total of $20,000. Employees aged 60-63 can contribute an enhanced catch-up of $5,250, for a total of $21,750.
What are the two employer match options for a SIMPLE IRA?
Employers have two mandatory contribution options. Option 1: Dollar-for-dollar match up to 3% of the employee's compensation (can be reduced to 1% in two out of five years). Option 2: Non-elective 2% contribution for every eligible employee, regardless of whether they contribute. The 3% match typically costs less for employers with low participation rates.
Who is eligible to participate in a SIMPLE IRA?
Employees who earned at least $5,000 in any two prior calendar years and are expected to earn at least $5,000 in the current year are eligible. Employers may use less restrictive eligibility requirements (or waive them entirely) but may not use more restrictive ones. SIMPLE IRAs are only available to employers with 100 or fewer employees.
What are the early withdrawal penalties for SIMPLE IRA?
SIMPLE IRA withdrawals before age 59½ are subject to a 10% early withdrawal penalty. However, if you withdraw within the first two years of participation in the plan, the penalty jumps to 25%. After the two-year period, the 10% standard penalty applies. Certain exceptions (disability, substantially equal payments, etc.) may avoid the penalty.
How does a SIMPLE IRA compare to a SEP-IRA for a self-employed person?
A SEP-IRA allows much higher contributions — up to $70,000 for 2025 vs $16,500 employee deferral for SIMPLE IRA. However, a SEP requires proportional contributions for all employees, making it expensive with staff. A SIMPLE IRA is better for businesses with employees where the owner wants a plan but can't afford high SEP contributions for all workers.
Can I roll a SIMPLE IRA into a traditional IRA?
Yes, but only after a two-year waiting period from the date you first participated in the SIMPLE IRA plan. Before the two-year period, you can only roll the SIMPLE IRA into another SIMPLE IRA. After two years, you can roll to a traditional IRA, SEP-IRA, 401(k), or another SIMPLE IRA without tax consequences.