In 2007 and 2008, an employee who participates in a Simple IRA plan may contribute up to a maximum of $10.5K to the plan, and $13K if they are over 50. Are these limits all calculated prior to adding in the employer contribution of 3% dollar-for-dollar? If yes, the employer contribution might push them over the $10.5K limit. I want to make sure the employee doesn't need to back out the the employer contribution when calculating their own contribution.

Does Simple IRA Limit of $10.5K Exclude The Employer Contribution?

Feb 06, 2008 1 Replies

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Will 18 years ago

In 2007 and 2008, an employee who participates in a Simple IRA plan may contribute up to a maximum of $10.5K to the plan, and $13K if they are over

Are these limits all calculated prior to adding in the employer contribution of 3% dollar-for-dollar? If yes, the employer contribution might push them over the .5K limit. I want to make sure the employee doesn't need to back out the the employer contribution when calculating their own contribution.

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Phil Marti 18 years ago

Yes. That's a salary deferral limit. Employer contributions are allowed on top of that.

See IRS Publication 525.

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