Employees can contribute up to $17,000 in salary-reduction deferrals to a SIMPLE IRA in 2026, up from $16,500 in 2025. A SIMPLE IRA is a retirement plan for businesses with 100 or fewer workers that combines employee salary deferrals with required employer contributions. The exact amount you can save depends on your age, your employer's size, and whether you also use another workplace plan. According to the IRS, the 2026 figures reflect inflation adjustments announced in Notice 2025-67.
Table of Contents
- How much can employees contribute in 2026?
- What extra can workers 50 and older save?
- Do smaller employers have higher limits?
- What must employers put in?
How much can employees contribute in 2026?
Most employees can defer up to $17,000 from pay into a SIMPLE IRA in 2026. That money comes out before income tax and grows tax-deferred until withdrawal. The limit applies to your own salary-reduction contributions only.
It does not include money your employer adds through matching or nonelective contributions. If you earn less than the limit, you cannot contribute more than you earn. Spreading contributions across paychecks can help you reach the full amount by year-end.
What extra can workers 50 and older save?
Workers age 50 or older by year-end can add $4,000 as a catch-up contribution in 2026 if the plan permits it. That raises their personal deferral total to $21,000. Workers ages 60, 61, 62, and 63 qualify for a larger SECURE 2.0 catch-up of $5,250 in SIMPLE plans.
The IRS sets that higher window only for those four ages in 2026, as shown on the IRS SIMPLE IRA limits page. You must still have enough earnings to support the extra deferral. Check your plan documents early, because the employer must allow catch-up contributions.
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Do smaller employers have higher limits?
Yes. Employers with 25 or fewer employees earning at least $5,000 qualify automatically for higher 2026 limits. Their workers can defer up to $18,100, plus a $3,850 catch-up at age 50 or older.
Employers with 26 to 100 employees can elect the same $18,100 limit. To do so, they must provide either a 4% matching contribution or a higher nonelective contribution. Fidelity describes these thresholds in its 2026 SIMPLE IRA limits guide. Ask your benefits office which limit your plan uses before setting your deferral rate.
- 25 or fewer qualifying employees: higher $18,100 limit applies automatically
- 26 to 100 employees: higher limit applies only if employer elects it and raises contributions
- Over 100 employees: employer cannot sponsor a new SIMPLE IRA
What must employers put in?
Every SIMPLE IRA employer must contribute each year. The basic formula is either a dollar-for-dollar match up to 3% of pay or a 2% nonelective contribution for each eligible employee. The match rewards workers who contribute themselves.
The nonelective contribution goes to eligible workers even if they defer nothing. Only pay up to $360,000 in 2026 counts when calculating those employer contributions. If you also participate in another employer plan, such as a 401(k), your combined 2026 elective deferrals across all plans cannot exceed $24,500. Track both plans together to avoid an excess contribution.
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