SEP-IRA Plan - Simplified Employee Pension Plan

SEP-IRA offers tax-savings potential as you save for retirement. You'll also benefit from T. Rowe Price's low-cost, strong fund performance. Call 1-800-831-1344 to get started.

Eligible Employer: Self-employed individuals and business owners who wish to make contributions for themselves and their employees. Employers using leased employees or that have any other retirement plan may not use IRS Form 5305-SEP.
Employer Deductible Limit: Up to 25% of total compensation* of eligible employees. Contribution percentage is determined by employer each year. Each eligible employee must receive the same percentage of compensation.
Maximum Contribution for Employees: For 2017, the lesser of $54,000 or 25% of compensation. For 2018, the lesser of $55,000 or 25% of compensation.
Salary Deferrals Allowed: No.
Employer Fees: No annual fees or set-up costs1
Plan Set-up Deadline: Your company's tax filing deadline (including extensions)
Reporting Requirements: No plan tax filing is required, IRA based plan
Investment Options: Choose from over 100 no-load mutual funds
SEP-IRA Plan Benefits
Attractive Tax Savings
  • Save over $2,200** in current taxes per year while you build your retirement savings.
  • Deduct contributions you make to your SEP-IRA plan account as well as accounts for any employees.
  Without a
SEP-IRA Plan
With a
SEP-IRA Plan
Net Business Income $100,000 $100,000
Less: Standard Deduction, ½ Employment Tax $31,065 $31,065
Less: Plan Contribution 0 $18,587
Taxable Income $68,935 $50,348
Regular Tax Due $7,891 $5,661
Self-Employment Tax Due $14,130 $14,130
Total Tax Before Tax Credits $22,021 $19,790
Tax Savings** $0 $2,230
Tax-Deferred Growth Potential and Generous Contribution Limits
  • You can contribute up to $54,000 in 2017 and up to $55,000 in 2018 - much higher than the annual limit for Traditional and Roth IRAs.
  • Any earnings on your savings are tax-deferred until withdrawn.
Low Costs
  • No participant fees when you subscribe to paperless delivery.1
  • Deduct contributions you make to your SEP-IRA plan account as well as accounts for any employees.
Easy Maintenance, Easy Saving
  • You make deductible contributions directly to individual retirement accounts (SEP-IRAs) for yourself and your employees.
  • Participants may rollover or transfer to a T. Rowe Price SEP-IRA.

*Maximum amount of compensation that can be used in determining contribution is $270,000 for tax year 2017 and $275,000 for tax year 2018. This amount is increased periodically for inflation.

**Based on 2018 IRS Tax Tables. This chart represents an unincorporated, self-employed, married individual under age 50 with two dependent children, filing jointly. The individual has net business income of $100,000 and the spouse has no earned income. The chart shows the difference between the tax due if no contributions are made and the tax due if the maximum contribution is made to a SEP-IRA Plan. While personal exemptions are eliminated for 2018, there is a child tax credit of $2,000 for each child for 2018. This calculation has not taken into account the pass-through deduction that may be available. Actual savings will vary depending on your personal circumstances and the availability of the pass-through deduction. Please consult with your tax advisor to discuss your specific situation. 

1 An annual $20 account service fee is charged for each mutual fund account with a balance below $10,000. The $20 account service fee will be waived for the following circumstances: Subscribe to electronic delivery of statements and confirmations; maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, and Small Business Retirement Plans); or qualify for T. Rowe Price Select Client Services. Participants can subscribe to paperless delivery via the T. Rowe Price website once their account is established. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant account for that year or when the proceeds are being used for a rollover, transfer or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA.

All investments are subject to market risk, including the possible loss of principal. Mutual funds are subject to management fees and expenses.

A retirement account should be considered a long-term investment. Retirement accounts generally have expenses and account fees, which may impact the value of the account. Early withdrawals are subject to taxes and possible penalties. For more detailed information about taxes, consult a tax attorney or accountant for advice.

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Call a Small Business Retirement Specialist at 1-800-831-1344

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Employee - Ready to get started?