Updated October 21, 2026. Quick answer: Publication 560 is the IRS guide to retirement plans an employer or self-employed person can set up, and the web edition is for 2025 returns. It covers SEP, SIMPLE and qualified plans, and for 2025 it gives an elective deferral limit of $23,500 and a defined contribution limit of $70,000. Chapter 5 holds the worksheets for self-employed owners.
Quick reference
| Item | As the IRS publication states it |
|---|---|
| Maximum compensation used for contributions and benefits, 2025 (What’s New) | $350,000 |
| Elective deferral limit, other than catch-up (What’s New) | $23,500 for 2025 and $24,500 for 2026 |
| Defined contribution plan limit, other than catch-up (What’s New) | $70,000 for 2025 and $72,000 for 2026 |
| Defined benefit annual benefit limit (What’s New) | $280,000 for 2025 and $290,000 for 2026 |
| SIMPLE salary reduction limit, other than catch-up (What’s New) | $16,500 for 2025 and $17,000 for 2026 |
| Catch-up limit, plans other than SIMPLE (What’s New) | $7,500 for 2025 and $8,000 for 2026 |
| Higher catch-up limit for ages 60 to 63 (What’s New) | $11,250 ($5,250 for SIMPLE plans) |
What the publication covers
The introduction says “This publication discusses retirement plans you can set up and maintain for yourself and your employees.” It lists the plan types: SEP plans, SIMPLE plans, and qualified plans, including 401(k) plans. The cover line reads “For use in preparing 2025 Returns”.
The topics it names include “What type of plan to set up.” “How to set up a plan.” and “How much you can contribute to a plan.”
Chapters in plain words
- Chapter 1, Definitions You Need To Know: terms such as annual additions, compensation, elective deferral and highly compensated employee.
- Chapter 2, Simplified Employee Pensions (SEPs): who is eligible, setting up a SEP, contribution limits and deducting contributions.
- Chapter 3, SIMPLE Plans: how a SIMPLE IRA plan works for employers and employees.
- Chapter 4, Qualified Plans: profit-sharing, 401(k), money purchase and defined benefit plans, including Table 4-1, Carryover of Excess Contributions Illustrated.
- Chapter 5, Table and Worksheets for the Self-Employed: the Rate Table for Self-Employed, the Rate Worksheet for Self-Employed and the Deduction Worksheet for Self-Employed.
- Chapter 6, How To Get Tax Help.
The figures that matter
The What’s New section says “For 2025, the maximum compensation used for figuring contributions and benefits is $350,000.”
On deferrals it says “The limit on elective deferrals, other than catch-up contributions, is $23,500 for 2025 and $24,500 for 2026.” For contributions to a defined contribution plan, “The limit on contributions, other than catch-up contributions, for a participant in a defined contribution plan is $70,000 for 2025 and increases to $72,000 for 2026.”
For pensions it says “The limit on annual benefits for a participant in a defined benefit plan is $280,000 for 2025 and increases to $290,000 for 2026.” For SIMPLE plans, “The limit on salary reduction contributions, other than catch-up contributions, is $16,500 for 2025 and increases to $17,000 for 2026.”
For older workers, “The catch-up contribution limit for SIMPLE plans is generally $3,500 for 2025 and $4,000 for 2026.” The higher catch-up rule reads “For 2025 and 2026, the higher limit on catch-up contributions for such participants is $11,250 ($5,250 for SIMPLE plans).” Our own pages on the 2026 numbers are 401(k) contribution limits for 2026 and 401(k) catch-up contributions for 2026.
SEP and SIMPLE basics
For SEPs, the publication says “Contributions you make for 2025 to a common-law employee’s SEP IRA can’t exceed the lesser of 25% of the employee’s compensation or $70,000.” On paperwork it says “You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP.” See Form 5305-SEP and SEP IRA contribution limit for 2026.
For SIMPLE plans, “Generally, if you had 100 or fewer employees who received at least $5,000 in compensation last year, you can set up a SIMPLE IRA plan.” Table 1 gives the setup window for a SIMPLE as “Any time between January 1 and October 1 of the calendar year.” See Form 5305-SIMPLE and SIMPLE IRA contribution limit for 2026.
The self-employed worksheets
Chapter 5 says “if you are self-employed, you must use the rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP IRA or qualified plan.” It gives one example: “If your plan’s contribution rate is 10% of a participant’s compensation, your rate is 0.090909.”
The worksheets have a limit on who can use them: “The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan.” For solo owners, our solo 401(k) contribution calculator is a companion tool.
Where this comes from
The IRS page About Publication 560 opens with “This publication discusses retirement plans you can set up and maintain for yourself and your employees.” It links the PDF and eBook editions and the earlier revisions of the publication.
This page describes the web edition of Publication 560 (2025), Retirement Plans for Small Business, as served on irs.gov on October 21, 2026. The IRS can revise a publication after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Treating the 2026 amounts as the main edition. The title is 2025 and the cover says “For use in preparing 2025 Returns”, with 2026 amounts shown beside them in What’s New.
- Using chapter 5 when you have more than one plan. The IRS says “The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan.”
- Looking here for the full 403(b) rules. The publication says “The comprehensive rules that apply to section 403(b) plans.” are covered in Pub. 571.
- Applying the 401(k) catch-up figure to a SIMPLE plan. The publication gives separate numbers: “The catch-up contribution limit for SIMPLE plans is generally $3,500 for 2025 and $4,000 for 2026.”
Related: IRS publications by number, SEP IRA contribution limit for 2026, SIMPLE IRA contribution limit for 2026, Solo 401(k) contribution limit for 2026, Form 5305-SEP, Form 5305-SIMPLE, 401(k) contribution limits for 2026, and Solo 401(k) vs SEP IRA for a sole proprietor.
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Answer againSources
- IRS, Publication 560 (2025), Retirement Plans for Small Business (irs.gov): https://www.irs.gov/publications/p560
- IRS, About Publication 560, Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans) (irs.gov): https://www.irs.gov/forms-pubs/about-publication-560
Read from the IRS pages linked above on October 21, 2026. General information, not tax or legal advice. The IRS publication and the instructions for your own form control, and your own facts decide the outcome.