The maximum employee contribution to a SIMPLE IRA is $17,000 for 2026. Workers aged 50 and older can contribute additional catch-up amounts, and your employer is required to kick in money on top of that. Here’s how all the pieces fit together.
Employee Contribution Limits for 2026
You can defer up to $17,000 of your salary into a SIMPLE IRA in 2026. This is the base limit that applies to all eligible employees regardless of age. The money comes out of your paycheck before taxes, reducing your taxable income for the year.
If you also participate in another employer’s retirement plan during the same year (a 401(k) at a second job, for example), there’s a combined cap. The total of all your elective deferrals across every employer plan you participate in cannot exceed $24,500 for 2026.
Catch-Up Contributions by Age
Workers 50 and older can contribute beyond the $17,000 base, but the exact catch-up amount depends on your age and the size of your employer.
For most SIMPLE plans, the catch-up limit is $4,000 in 2026, bringing the total employee contribution to $21,000. However, certain SIMPLE plans (sometimes called “applicable” SIMPLE plans, typically offered by smaller employers) use a slightly different catch-up figure of $3,850.
A newer rule created by SECURE 2.0 gives an even higher catch-up allowance to employees who are specifically 60, 61, 62, or 63 years old. If you fall into that narrow age window, your catch-up limit is $5,250 in 2026, pushing your maximum employee contribution to $22,250. Once you turn 64, you drop back to the standard catch-up amount for those 50 and over.
Higher Limits for Small Employers
SECURE 2.0 also created a higher contribution tier for businesses with 25 or fewer employees. At these smaller companies, the employee deferral limit rises to $18,100 for 2026. Employers with 26 to 100 employees can opt into this higher limit too, but they must increase their own contributions (more on that below) to qualify.
Required Employer Contributions
Unlike a 401(k), where employer contributions are optional, a SIMPLE IRA requires the employer to contribute every year. The employer picks one of two formulas annually and must notify employees of the choice.
- Dollar-for-dollar match up to 3% of compensation. If you earn $60,000 and defer at least $1,800 (3% of your pay), your employer contributes $1,800. The employer can temporarily reduce this match to as low as 1%, but it can’t stay below 3% for more than two out of any five calendar years.
- 2% nonelective contribution. The employer contributes 2% of every eligible employee’s pay regardless of whether the employee contributes anything. Compensation used for this calculation is capped at $360,000 for 2026, so the maximum nonelective contribution per employee is $7,200.
Employers with 26 to 100 employees who adopt the higher employee deferral limit must also increase their own contributions: either a 4% match or a 3% nonelective contribution.
On top of these required contributions, SECURE 2.0 now allows employers to make an additional nonelective contribution to each eligible employee, up to the lesser of 10% of compensation or $5,000. This is optional and must be applied uniformly across eligible employees.
Total Maximum You Could Receive
Your combined annual total depends on your age, your employer’s size, and which contribution method your employer chooses. For a worker under 50 at a standard SIMPLE IRA employer, the math looks like this: $17,000 in employee deferrals plus a 3% employer match or 2% nonelective contribution. At a salary of $60,000 with a 3% match, that’s $18,800 going into your account for the year.
For a 62-year-old employee at a small company using the higher limits, the ceiling is considerably more generous: $18,100 in base deferrals, $5,250 in catch-up contributions, the employer’s required match or nonelective contribution, and potentially up to $5,000 in the new optional employer nonelective contribution.
All contribution limits are subject to annual cost-of-living adjustments, so these numbers typically tick upward over time. The IRS announces updated figures each fall for the following tax year.