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Simplified Employee Plan (SEP)

SEP IRA stands for Simplified Employee Pension IRA. It’s a tax-deferred retirement plan for small business owners, where the employer makes deductible contributions to their own IRA as well as deductible contributions to IRAs for eligible employees.

Key Benefits of a Simplified Employee Plan:

  • Minimal paperwork and reporting.
  • Employers can change their annual contributions.
  • Deductible employer contributions are made directly to employees’ IRAs.
  • All contributions must be 100% immediately vested.

Who Can Establish:

  • Self-employed Persons
  • Partnerships
  • S-corporations
  • C-corporations
  • Non-profit Groups

Annual Contributions:

  • Who contributes: employer
  • Up to 25% of an employee’s eligible compensation or $49,000, whichever is less.
  • Employees who earn $245,000 or more are not eligible.

Simplified Employee Plan (SEP) Candidates:

  • Smaller employers that would like a plan that is easy to communicate and inexpensive to operate.
  • Smaller Employers that want to be solely responsible in funding the employee retirement plan thereby getting a larger business tax deduction.
  • Employers that may not be able to afford the costs of maintaining a Profit Sharing or 401(k).
  • Employers who are looking for the maximum eligibility requirements to be able to exclude certain employees.

Contact a LPL Investment Consultant to go over your options for retirement.

Financial Advisors of LPL Financial are Registered Representatives with, and Securities, Advisory Services and Insurance Products are offered through LPL Financial and its affiliates, Member FINRA/SIPC. LPL Financial is not a registered broker/dealer. Investments are: Not FDIC insured, may lose value, are not bank guaranteed, and are not obligations of LPL Financial. LPL Branch Office located at 1311 Carolina Ave, Washington, North Carolina 27889. Investment Advisory Services offered through LPL Financial, a SEC Registered Investment Advisor


This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial U.S. registered representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.


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