Small business retirement


What is a SEP-IRA?

A SEP-IRA (Simplified Employee Pension) is an easy to administer retirement plan for anyone who is self-employed, owns a business, employs others, or earns freelance income.


Who can participate?

Employers are generally the sole contributors, but employees may be able to make traditional IRA contributions to the SEP-IRA.

Employer contribution limits

  • You can contribute up to 25% of the employee's total compensation or a maximum of $66,000 for 2023 tax year or $69,000 for the 2024 tax year, whichever is less.
  • If you're self-employed, your contributions are generally limited to 20% of your net income. (Net compensation for self-employed individuals is generally the net profit from IRS Schedule C reduced by the deductible self-employment tax. The eligible compensation limit, indexed for inflation by the IRS, is $330,000 for 2023 or $345,000 for 2024.)
  • Contributions are deductible and aren't required every year.
  • Contributions must be the same for employers and employees up to the specified limit.
  • SECURE 2.0 allows employers of SEP-IRAs to offer the ability to make Roth contributions. At this time, Vanguard will be not be offering this option.

Employee contribution limits

  • Unlike other plans, employees can't defer their salary to make contributions to a SEP-IRA. They may be able to make traditional IRA contributions to a SEP-IRA of up to $7,000 ($8,000 for employees age 50 or older) for the 2024 tax year.
  • This amount is the total contribution allowed by the IRS that employees can make to all their IRAs (SEP, traditional, or Roth) each year.

Investment choices

If you're opening a SEP-IRA for more than one person, you can choose from a variety Vanguard mutual funds. Other types of investments don't apply. However, if you're opening a one-person SEP-IRA, you can choose from Vanguard mutual funds, Vanguard ETFs®, mutual funds and ETFs from other companies, individual stocks, CDs (certificates of deposit), and bonds.

Browse Vanguard's complete mutual fund lineup

Browse Vanguard's complete ETF lineup

Who can use the plan?

Generally, employees must be allowed to participate if they're 21 or older, earn at least $750 in the tax year, and have worked for you in at least 3 of the past 5 years. You can set less restrictive eligibility rules if you choose.

Refer to IRS Form 5305-SEP for more details (PDF)

  • There's no fee to establish an account.
  • Single-participant SEP-IRA plan (self-funded on See Vanguard annual account service fees
  • Multi-participant SEP-IRA plan (funded by my employer on Small Business Online):

    $20 for each Vanguard mutual fund in each account.

    We'll waive the fee if you:

  • Have at least $10,000 per Vanguard fund  or
  • Have at least $50,000 in qualifying Vanguard assets. See what Vanguard assets qualify  or
  • Sign up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates.

  • Certain employee notifications are required, but there's no IRS reporting.

  • All contributions to your SEP-IRA belong to you immediately, and you can withdraw them at any time.
  • You can't take a loan from your SEP-IRA
  • If you withdraw before age 59½, you're subject to a 10% federal penalty tax. Certain expectations may apply. You'll pay ordinary income tax on any taxable distributions.

Ready to get started?

Set up your new SEP-IRA today!


Looking to open a SEP-IRA for yourself?

Need to open a SEP-IRA that will be funded by your employer?

Ready to get started?

Set up your new SEP-IRA today!


Looking to open a SEP-IRA for yourself?

Need to open a SEP-IRA that will be funded by your employer?

Learn more about small-business retirement

Enhance your retirement plan

Looking to enrich your existing retirement plan with quality mutual funds? Our investment-only service opens the door for you to offer Vanguard funds. 

Learn about our investment-only option

Move your plan to Vanguard

Consider moving the small-business plan you hold elsewhere to Vanguard. You can enjoy high-quality, low-cost funds and reliable service for your portfolio.

Learn how to transfer your plan

All investing is subject to risk, including the possible loss of the money you invest.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.

The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review Form CRS and the Vanguard Personal Advisor Services Brochure (PDF) for important details about the service, including its asset-based service levels and fee breakpoints.