Updated September 4, 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. Milliman’s 2027 IRS limits forecast (published August 13, 2026, based on ten months of actual CPI data) projects the underlying §415(c) defined-contribution limit at $75,000 for 2027, and the §401(a)(17) compensation cap at $375,000, the same figures that would set the 2027 SEP cap once the IRS makes it official, though Milliman’s report does not itself use the word “SEP.”
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 2027 forecast update, 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 |
A $72,000 SEP cap is a ceiling, not a plan. Self-employed savers still need a strategy.
Milliman’s forecast tells you the limit. It doesn’t tell you what to do with it. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. 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.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions (age, investable assets, location), then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Why 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
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.