In 2026, the annual contribution limit for employee elective deferrals is $17,000 (up from $16,500 in 2025), and the catch-up contribution limit is $4,000 (up from $3,500 in 2025) for those 50 and older.
For small employers (25 or fewer employees), the annual contribution limit for employee elective deferrals increases to $18,100 (up from $17,600 in 2025), but the catch-up contribution limit remains at $3,850 (unchanged from 2025) for those 50 and older. The higher catch-up limit remains at $5,250 (unchanged from 2025) for those ages 60 to 63.
Employer Eligibility
Not all employers are eligible under the SECURE 2.0 Act. For instance, employers are not eligible if an IRC section 401(a), 403(a), or 403(b) plan covering the same employees was maintained within a three-year period prior to establishing the SIMPLE IRA plan.
Talk to your IRA provider to verify your eligibility under the guidelines of SECURE 2.0 before establishing or changing your IRA plan. OnPay is not responsible for verifying or ensuring SECURE 2.0 employer eligibility.
Furthermore, the size of your company will determine maximum deferral amounts
Employers with no more than 25 employees
For employers with 25 or fewer employees, the SIMPLE IRA annual deferral limit has been increased to $18,100 (up from $17,600), but the catch-up contribution limit remains at $3,850.
| Employers with no more than 25 employees | 2025 | 2026 |
|---|---|---|
| Maximum employee elective deferral | $17,600 | $18,100 |
| Employee catch-up contribution (if age 50 or over) | $3,850 | $3,850 |
| Employee higher catch-up contribution (if age 60-63 by year-end) | $5,250 | $5,250 |
Employers with 26 or more employees
An employer with 26 or more employees may also be eligible to provide higher deferral limits, provided they make the election to increase limits formally and in writing (with documentation), and offer one of the following:
- A 3% non-elective employer contribution; or
- A 4% matching contribution
For employers with 26 or more employees, the 2026 SIMPLE IRA annual deferral limit has been increased to $17,000 (up from $16,500 in 2025), and the catch-up contribution limit has been increased to $4,000 (up from $3,500 in 2025).
| Employers with 26 or more employees | 2025 | 2026 |
|---|---|---|
| Maximum employee elective deferral | $16,500 | $17,000 |
| Employee catch-up contribution (if age 50 or over) | $3,500 | $4,000 |
| Employee higher catch-up contribution (if age 60-63 by year-end) | $5,250 | $5,250 |
Required written policy updates and notification
Eligible employers of all sizes must notify participants of the newly increased contributions and limits, and must update its company plan in writing. This notice must also be included with the required annual employer notification. Unless such notification was provided by the employer prior to November 2, 2024, the earliest this provision could be implemented to an existing SIMPLE IRA plan is for the 2026 plan year.
Indicating your Company's eligibility for the increased IRA limit
Go to Company, then Company Preferences.
If eligible under the terms of the SECURE 2.0 Act, select “Yes” to increase the SIMPLE IRA limit.
Verify your eligibility before making this selection
By selecting “Yes”, you are affirming your eligibility for an increased IRA limit under the terms of the SECURE 2.0 Act. Because this has a direct impact on employee withholding calculations throughout the year, once enabled, this selection can only be disabled by contacting OnPay support.
Indicating employee catch-up eligibility
In the employee profile, click Payroll Deductions.
Under "Preferences", you'll find four options:
- Use Retirement Benefit Catch-up Limit (401(k), SIMPLE IRA, 403(b), etc.)
- Use HSA Catch-up Limit
- Higher Retirement Benefit Catch-up (ages 60-63)
- HSA Limit (Individual / Family)
Use Retirement Benefit Catch-up Limit (401(k), SIMPLE IRA, 403(b), etc.)
Employees fifty years old or older are eligible for catch-up contributions for retirement savings plans. Toggling this switch "on" will allow the catch-up contribution limits for any retirement savings plan added under "Employee Deductions".
Higher Retirement Benefit Catch-up Limit (ages 60-63)
Employees between the ages of 60 and 63 are eligible for higher catch-up contributions. Toggling this switch "on" will allow the higher contribution limits for any retirement savings plan added under "Employee Deductions".
Note:
Toggling on the "Higher Retirement Benefit Catch-up Limit automatically enables "Use Retirement Benefit Catch-up Limit" for the employee.
Use HSA Catch-up Limit
For Health Savings Account contributions, there is a catch-up contribution limit of $1,000 for employees age 55 or older. This limit can also depend on whether the HSA is for an individual or a family.
| HSA contribution limits | |
|---|---|
| Employee catch-up contribution (if age 55 or older) | $1,000 |
| Individual HSA Limit | $4,400 |
| Family HSA Limit | $8,750 |
Our Tax Accuracy Guarantee
Bottom line: We take the accuracy of our payroll tax calculations very seriously — and our accuracy guarantee ensures we’ll always have your back.
However, because we file on your behalf using information provided by you, it's important that you provide and input accurate information about your company, its employees, and the states and districts in which they live and your business operates, including all IDs and tax rates. Our Tax Accuracy Guarantee picks up where you leave off by covering all our calculations, and the filings and payments we base on them.
In rare circumstances, OnPay may need additional information from you, or may request you take action in order for us to file and pay your taxes. If such information is requested by us, but never provided by you, any affected tax filings and payments will not be covered by our Tax Accuracy Guarantee.
Helpful IRS resources
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