Key things to know
Who is eligible | Self-employed individuals or small-business owners, primarily those with only a few employees.1 Must be a sole proprietor, a business owner, in a partnership, or earn self-employment income by providing a service. |
Tax benefits | Earnings are tax-deferred and contributions are tax-deductible. |
Who contributes | Funded by employer contributions. |
Contribution amounts | Must be made by the employer and can vary each year between 0% and 25% of compensation (maximum $70,000 for 2025 and $69,000 for 2024). Each eligible employee must receive the same percentage. |
Withdrawals | 10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses. Required minimum distributions starting at age 73. Request a withdrawal |
Investment options | A wide range of mutual funds, stocks, bonds, ETFs, and more, depending on the investment type selected. |
Administrative responsibilities | Employee notification of employer's contribution. Employers must fill out and retain Form 5305 SEP (PDF) in their records. No plan tax filings with IRS. Each employee must open an individual SEP IRA account.
As an example, for a sole proprietor April 15 would typically be the deadline to establish and fund a SEP for the prior tax year. If an extension was filed a sole proprietor can establish and fund a SEP IRA by October 15. For more information please see Maintain your plan. |
Deadlines | SEP IRAs must be established and funded by your tax filing deadline plus applicable extensions. |
How to make contributions | You may generally deposit checks by mail, through mobile deposit, online via a Bill pay service, via EFT, or call us for assistance. Always be sure to include your account number with your contributions. Please review the terms and conditions for the investment type that you select for more information on which features are available. Learn more |