2026 SIMPLE IRA Contribution Limits: Catch-Up and Employer Match

The 2026 SIMPLE IRA contribution limits let employees defer up to $17,000 of salary, up from $16,500 in 2025.¹ Workers at certain small employers can defer up to $18,100. On top of that, catch-up contributions add $4,000 at age 50 and $5,250 between ages 60 and 63, and your employer is required to chip in through either a match or a flat contribution.

The Employee Deferral Limit

$17,000 is the standard cap on what you can elect to have withheld from your paycheck and sent to a SIMPLE IRA in 2026.² The IRS adjusts this figure each year under IRC Section 408(p)(2)(E). Contributions go in pre-tax, or after-tax if your plan offers a Roth option.

A higher $18,100 limit applies at “eligible employers” under SECURE 2.0 Section 117. These are businesses that did not maintain a 401(k), 403(a), or 403(b) plan covering substantially the same employees during the three years before the SIMPLE IRA was set up. If your employer has 25 or fewer employees who earned at least $5,000 in the prior year, the $18,100 limit applies automatically. Employers with 26 to 100 employees can choose to use it, but only if they also raise their employer contributions.³

If you work two jobs and both offer a SIMPLE IRA, your combined deferrals across both plans still cannot exceed the single limit that applies to you. Going over triggers a 6% excise tax on the excess for every year it stays in the account.⁴ Pulling the excess out (with any earnings on it) before your tax filing deadline, including extensions, avoids the penalty.

Catch-Up Contributions by Age

If you turn 50 or older by December 31, 2026, you can add $4,000 on top of your regular deferral.¹ That takes the maximum employee contribution to $21,000 under the standard limit, or $22,100 under the $18,100 limit.

SECURE 2.0 created a bigger catch-up for a narrow age window. If you turn 60, 61, 62, or 63 during the calendar year, you can defer an extra $5,250 instead of $4,000. That’s 150% of the regular catch-up.² A 62-year-old under the standard limit could defer up to $22,250 in a single year. Once you turn 64, the catch-up drops back to $4,000.

Your age on December 31 controls which tier applies for the whole year. If you turn 60 on December 30, the super catch-up is available for that entire calendar year.

What Your Employer Has to Contribute

Every SIMPLE IRA sponsor is required to contribute to employees’ accounts each year. Skipping the year isn’t an option. Employers pick one of two formulas:⁵

A dollar-for-dollar match on your deferrals up to 3% of your compensation. The employer can temporarily lower this to as little as 1%, but not in more than two years out of any five-year period.
A flat 2% of compensation for every eligible employee, whether or not the employee defers anything.

Employers with 26 to 100 employees who elect the $18,100 deferral limit have to give more: the match goes to 4% of compensation, or the nonelective contribution goes to 3%.³

Employer contributions are calculated on compensation up to a $360,000 cap for 2026. An employee earning $400,000 is treated as earning $360,000 for match purposes, which caps a 3% match at $10,800. Plans may also make an additional nonelective contribution of up to $5,300 per employee for 2026.¹

Putting the Total Together

SIMPLE IRAs don’t have a single overall annual cap the way 401(k) plans do. The total is simply your deferral plus your employer’s contribution. A few common 2026 scenarios:

Under 50, standard limit: $17,000 plus employer match or nonelective.
Age 50–59 or 64 and older, standard limit: $17,000 plus $4,000 catch-up plus employer contribution.
Age 60–63, standard limit: $17,000 plus $5,250 super catch-up plus employer contribution.
Age 60–63 at an eligible employer using the higher limit: $18,100 plus $5,250 super catch-up plus employer contribution.

Take a 62-year-old earning $100,000 whose employer offers a 3% match. Employee deferrals of $22,250 combine with $3,000 from the employer for $25,250 landing in the account in one year.

2026 SIMPLE IRA Numbers at a Glance

Standard salary reduction limit: $17,000
Higher limit at eligible small employers: $18,100
Catch-up contribution at age 50 and up: $4,000
Super catch-up at ages 60 through 63: $5,250
Employer match: up to 3% of compensation, or 4% under the higher limit for employers with 26 to 100 employees
Nonelective contribution: 2% of compensation, or 3% under the higher limit
Additional nonelective contribution cap: $5,300 per employee
Compensation cap used for employer contributions: $360,000

All figures come from IRS cost-of-living adjustments in Notice 2025-67 and apply to the 2026 calendar year.¹

Roth Deferrals Use the Same Limits

SECURE 2.0 Section 601 allows employers to add a Roth option to a SIMPLE IRA.⁶ If yours has, you can direct some or all of your salary reduction into a Roth SIMPLE IRA. The same dollar limits apply. The money goes in after tax and grows tax-free.

Employer matching and nonelective contributions still land in a traditional pre-tax SIMPLE IRA even if you elect Roth deferrals. Not every plan has adopted the Roth feature, so ask your plan administrator. The mandatory Roth catch-up rule that applies to high earners in 401(k) plans does not apply to SIMPLE IRAs.

The Two-Year Rule That Changes What You Can Do With the Money

SIMPLE IRAs carry an unusually harsh early withdrawal penalty during the first two years of participation. Take money out before age 59½ in that window and the penalty is 25%, not the usual 10%.⁷ The two-year clock starts the day your employer makes the first contribution to your account, and it runs separately for each employer’s plan.

The same two-year window restricts rollovers. During it, you can only move funds into another SIMPLE IRA. Rolling to a traditional IRA, a 401(k), or any other non-SIMPLE account is treated as a fully taxable distribution and hit with the 25% penalty on top of regular income tax.⁷

After two years, SIMPLE IRAs follow the usual traditional IRA rules: a 10% penalty for early withdrawal, and rollovers into traditional IRAs, 401(k) plans, 403(b) plans, and governmental 457(b) plans are allowed. Standard exceptions can waive the penalty entirely, including withdrawals after age 59½, disability, certain medical expenses, qualified higher education costs, and up to $10,000 for a first-time home purchase.⁸ Those exceptions apply during the two-year period too, replacing the 25% penalty rather than trimming it.

1
Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
2
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
3
Internal Revenue Service. Notice 2024-2 – Miscellaneous Changes Under the SECURE 2.0 Act of 2022
4
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
5
Internal Revenue Service. SIMPLE IRA Plan
6
Internal Revenue Service. SECURE 2.0 Act Changes Affect How Businesses Complete Forms W-2
7
Internal Revenue Service. SIMPLE IRA Withdrawal and Transfer Rules
8
Internal Revenue Service. Retirement Plans FAQs Regarding SIMPLE IRA Plans