Updated October 9, 2026. Quick answer. A SEP IRA contribution for 2026 is capped at the lesser of 25% of compensation or $72,000 (up from $70,000 in 2025), the same dollar figure that caps total 401(k) contributions under 26 U.S.C. §415(c). The compensation used to compute the 25% side of that test is itself capped, at $360,000 for 2026, which is why the flat dollar cap becomes the binding number once someone’s pay clears roughly $288,000. The 2027 SEP cap and the underlying limits are not yet announced; the IRS publishes them in its annual retirement-plan limits notice, expected late October to mid-November 2026 (the 2026 notice is IRS Notice 2025-67).
More on the 2027 retirement figures: the 401(a)(17) pay limit for 2027, the key employee limit for 2027 and the SEP IRA pay threshold for 2027.
Related reading on this site: IRS Publication 560.
More IRS forms and schedules, read line by line: Form 5305-SEP instructions.
The 2026 limits: the 2026 SEP IRA limit and the 2026 SIMPLE IRA limits.
Looking for the employee 401(k) deferral limit rather than the SEP cap? See 401(k) contribution limits for 2027.
What is the SEP IRA contribution limit for 2027?
For 2026 a SEP IRA contribution is capped at the lesser of 25% of compensation or $72,000. The 2027 cap is not yet announced.
What is the overall 401(k) contribution limit for 2027?
The cap on total 401(k) contributions is the §415(c) limit: $72,000 for 2026, and the 2027 limit is not yet announced. The employee deferral limit is a separate figure that this page does not cover.
What’s actually settled, vs. still open
Settled for 2026: $72,000 dollar cap (26 U.S.C. §415(c)(1)(A)); $360,000 compensation cap (26 U.S.C. §401(a)(17)), both from IRS Notice 2025-67.
Projected, not official, for 2027: $75,000 dollar cap; $375,000 compensation cap, per Milliman’s July 2026 edition of its 2027 forecast, published August 13, 2026 (the firm’s own forecast, explicitly not an IRS figure, reissued monthly as the year’s actual CPI data comes in).
The numbers, year by year
| Year | §415(c) dollar cap | §401(a)(17) compensation cap |
|---|---|---|
| 2022 | $61,000 | $305,000 |
| 2023 | $66,000 | $330,000 |
| 2024 | $69,000 | $345,000 |
| 2025 | $70,000 | $350,000 |
| 2026 | $72,000 | $360,000 |
| 2027 (Milliman projection, Aug 13, 2026) | $75,000 | $375,000 |
Optional next step
Want help using this 2027 figure?
Ask an adviser how this limit fits your broader 2027 tax and retirement plan.
- No fee to request a match
- No obligation to hire
Expect questions about your situation, your name, email and phone, and phone verification by text. A match is not guaranteed.
The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
Opens here. Nothing loads and nothing reaches Kapitalwise until you press the button.
How our partner relationships workWhy a 401(k)-plan forecast sets the SEP number
A SEP IRA is funded entirely by employer contributions, capped by the same defined-contribution annual-addition limit that also bounds total 401(k) contributions (§415(c)(1)(A)) and the same compensation ceiling used across qualified plans (§401(a)(17)). There is no separate SEP-specific statute setting a different number, so Milliman’s qualified-plan forecast is the practically applicable projection here even though the firm frames its report around 401(k) plans rather than SEPs by name.
Sources
The 2026 figures on this page were checked against IRS Notice 2025-67 on September 29, 2026. The earlier-year rows were checked against the IRS notice for each of those years.
2026 figures: IRS Notice 2025-67, via the IRS newsroom release read 2026-09-04. Statute: 26 U.S.C. §415(c)(1)(A), §401(a)(17), applied to SEPs via §408(k). 2027 projection: Milliman, “2027 IRS Limits Forecast” (July edition), published 2026-08-13, read at milliman.com on 2026-09-04.
This page is updated the day the official figure is announced, and any projection above will be struck through rather than deleted, so the record of what was projected vs. what actually happened stays visible. See the 2027 numbers hub for every figure this program tracks, projected vs. official. General information, not tax or legal advice.
Related 2027 figures: AMT Exemption 2027, Foreign Earned Income Exclusion 2027, FSA Contribution Limit 2027, Kiddie Tax Thresholds 2027, QCD Limit 2027, Saver’s Credit 2027 and SIMPLE IRA Contribution Limit 2027.
For your own numbers, run the AUM Fee Calculator 2026: 1% Advisor Fee in Dollars.
See Read the adviser-hiring guide for more on this.
If your savings come from side income, see retirement contributions from side income.