SEP-IRAs for Employers | Saturna Capital

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Overview

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Streamline retirement savings for self-employed individuals and small business owners.

A Simplified Employee Pension Plan (SEP-IRA) is a retirement plan specifically designed for self-employed people and small business owners, offering an easy, flexible, and tax-advantaged way to save for retirement.

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Tax Advantages

Employer contributions are tax-deductible, and investment earnings grow tax-deferred until withdrawn.

Contribution Flexibility

SEP-IRAs offer higher contribution limits than other pension plans, but annual contributions are not required. Additionally, you can modify the employer contribution percentage each year — from 0% – 25% — to fit your situation even as it changes.

Minimal Administration

SEP-IRAs do not require any annual IRS reporting or complicated forms, making them an ideal low-maintenance option for small businesses.

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Plan Details

Plan Eligibility

SEP-IRAs are ideal for small business owners, or individuals who earn income from self-employment. This can include:

Sole proprietor and partner owners of a small business, including Subchapter S corporations
Individuals who are self-employed full-time or part-time (i.e., freelance work)
Individuals who are covered by another retirement plan at a full-time job

To be eligible for a SEP-IRA, individuals must:

Be 21 years of age or older
Earn a minimum of $750 of self-employed income for 2025

Establishment Deadline

The deadline to open and contribute to a SEP-IRA is your tax filing deadline, including any extensions. For most self-employed individuals and small-business owners, that deadline is usually April 15.

Per IRS instructions, Saturna Capital is required to report all SEP contributions according to the calendar year in which they are received. However, you can still claim the contribution for the prior year. For example, if you make a 2024 contribution to your SEP IRA on March 1, 2025, Saturna Capital is required to report the contribution to the IRS for 2025. However you can still claim the contribution on your 2024 tax return, assuming all other requirements are met.

Contributions and Limits

Quick facts

No annual contribution is required
All SEP-IRA contributions must be made by the employer
Contributions must be the same percentage for all employees, including the employer, based on W-2 wages
Contribution percentage can vary each year. See the table below for more information on contribution limits

Year	Income Limit	Contribution Limit	Catch-up Limit
2025	$350,000	25% of annual compensation or net earnings from self-employed income up to a maximum of $70,000.	N/A

For self-employed individuals, compensation means earned income.

SEP-IRAs with Other Retirement Plans

Quick facts

Employers are able to offer another qualified retirement plan in addition to the SEP-IRA
Individuals who are covered by another retirement plan at a full-time job are also eligible to establish a SEP-IRA

Withdrawals

Quick facts

Contributions are immediately 100% vested
Withdrawals may be subject to income taxes
WIthdrawals taken before age 59½ may be subject to tax penalties

Fees

Saturna's SEP-IRA Fees

Account Fees	Invested in Saturna's affiliated mutual funds only	Self-Directed Saturna Brokerage IRA¹
Account Opening	None	None
Account Maintenance	None	Potential inactive account fee²
Statement Fee	None	None
Low Balance Fee	None	None
Account Closing	None	None

Transaction Fees

	Invested in Saturna's affiliated mutual funds only	Self-Directed Saturna Brokerage IRA¹
Contributions	None	Subject to Commission Schedule
Distributions/Withdrawals³	None	Subject to Commission Schedule
Outgoing wire transfers and overnight delivery of proceeds from sales are subject to prevailing rates.
Trades / Exchanges	None	Subject to Commission Schedule
Account Transfers	None	In: None⁴ / Out: $75

¹ Self-Directed Brokerage IRAs may be subject to fees for services not listed in this chart. Please refer to the Saturna Brokerage Services Commission Schedule (available in the Saturna Brokerage Services Brochure and online at www. saturna.com/sbs) for more details.

² Inactive accounts have no trades settle in the calendar year from January 1 through December 31.

³ Withdrawals may be subject to income taxes, and if taken before age 59½, may be subject to tax penalties.

⁴ While Saturna does not have a specific charge for inbound transfers, the previous custodian may charge for the outbound transfer.

Compare Plans

Compare key features of our retirement plan options at a glance. Click on a plan name to explore detailed information about each offering.

Plan overview

	Health Savings Account	401(k)	SEP-IRA	SIMPLE-IRA	Cash Balance plans
Key advantage	An HSA is an investment-based savings account that can be used to pay for qualified medical expenses (as defined by the IRS) for you, your spouse, or your dependent(s).	Flexible Employer Contributions Diverse investment options	Easy to set up and maintain Flexible annual funding requirements	Salary deferral plan Less administration than 401(k)	Higher contribution limits Predictable benefits Maximize your savings Lower your taxes.
Eligible Employers	Must offer in tandem a Qualified High Deductible Health Plan	Generally, any business may establish a 401(k)	Any self-employed individual, business owner, or individual who earns more than $750 self-employed income	Businesses with 100 or fewer eligible employees and who do not currently maintain any other retirement plan	Generally any business may establish a cash balance plan, employees must have worked at least 1,000 hours and have taxable domestic income
Funding Responsibility	Funded by salary deferral and employer contributions	Funded by salary deferral and employer contributions, if elected under the plan; employer profit sharing	Employer contributions only	Funded by salary deferral and employer contributions	Cash Balance Plans are defined benefit pension plans with required annual contributions
Contribution Flexibility	2025: Individual: $4,300 Family: $8,550	Mandatory employer matching contributions (if elected)  Discretionary profit-sharing	Discretionary contributions	Mandatory employer contributions	Contribute more than $50,000 to your retirement accounts. Currently contribute, or want to contribute 3-4% to employees accounts. Have highly compensated employees.

Plan Features

	Health Savings Account	401(k)	SEP-IRA	SIMPLE-IRA	Cash Balance plans
Roth Accounts?	No	Yes	No	No	No
Loans?	No	Yes	No	No	Possible
Age Restrictions?	Yes, may exclude employees under age 18	Yes May exclude employees under age 21	Yes May exclude employees under age 21	None	Yes, may exclude employees under age 21
Employer-Paid Fees?	Dependent on plan	Annual fee	None	None	Yes
Catch-up Contributions?	$1,000 (age 55 and older)	Yes	None	Yes	N/A

Additional Details

	Health Savings Account	401(k)	SEP-IRA	SIMPLE-IRA	Cash Balance plans
Vesting	Employee and Employer contributions are immediately 100% vested	Employee salary-deferrals are immediately 100% vested Employer contributions may be subject to a vesting schedule	Contributions are immediately 100% vested	Contributions are immediately 100% vested	Employer contributions may be subject to a vesting schedule
Maximum Annual Contribution Per Employee	2025: Individual: $4,300 Family: $8,550	Employee: The lesser of $23,500 for 2025 or 100% of compensation (plus catch-ups) Employer: May be set by plan Overall maximum contribution (from all sources) is 100% of compensation, not to exceed $67,000 for 2025 (plus catch-ups)	Employee: N/A Employer: The lesser of $70,000 for 2025, or 25% of annual compensation (25% of self-employed income)	Employee: The lesser of $16,500 for 2025, or 100% of compensation (plus catch-ups) Employer: Either match employee contributions dollar-for-dollar up to 3% of compensation (maximum $16,500 for the 2025 plan year); can be reduced to as low as 1% in any 2 out of 5 years Or A 2% nonelective contribution of each eligible employee's compensation up to the annual income limits of $350,000 for 2025.	Maximum annual benefit can be up to $280,000 for 2025. Cash balance lump sum maximum for 2025 is $3,500,000. Contribution amounts vary by year, but are based on factors such as the participant's age, income, and estimated years to retirement.
Establishment Deadlines	Anytime	The last day of the employer's plan year (usually calendar year)	Employer's tax-filing deadline, including extensions	Oct. 1 of the year in which the plan is being established	The deadline to establish a cash balance plan is typically the tax filing deadline for the year the plan is to be effective
IRS Reporting by Employer	Form 8889	Form 5500	None	None	Form 5500

Frequently Asked Questions

What is a SEP-IRA?

A Simplified Employee Pension (SEP) IRA is a retirement savings plan designed for small business owners and self-employed individuals. It allows for tax-deductible employer contributions to individual SEP-IRA accounts for both the business owner and eligible employees.

Who can establish a SEP-IRA?

SEP-IRAs can be used by individuals who are a sole proprietor, in a partnership, or a business owner of either an unincorporated or incorporated business, including Subchapter S corporations.

Why should my business consider a SEP-IRA?

SEP-IRAs are low-stress retirement savings options, ideal for small business owners and/or individuals who earn income from self-employment. Key benefits include:

No complicated forms to fill out
No required annual IRS report
No mandatory annual contribution
Flexible annual funding requirements
Minimal administrative overhead

Who can contribute to a SEP-IRA?

Employers can contribute up to 25% of an employee's compensation, with a maximum limit of $70,000 for 2025.

Employees cannot contribute to a SEP-IRA.

Are contributions mandatory each year?

No, contributions to a SEP-IRA are discretionary. Employers can choose how much to contribute each year or even skip a year entirely, based on the business's financial situation.

What are the tax benefits of a SEP-IRA?

Tax-deductible contributions

Up to 25% of compensation, as much as $70,000 for 2025.

Tax-deferred growth potential

Any investment earnings grow tax-deferred until withdrawn.

Why Choose Saturna?

To learn more about the unique advantages of Saturna’s Employer Services offerings and more, visit our Employer Services landing page

Knowledgeable, Personalized Service

At Saturna Capital, we’re dedicated to making it as easy as possible to set up and manage your company’s employee benefits. We’ll help you customize a complete package to meet your company’s needs, including the choices you make for your SEP-IRA. Throughout the entire process, you can feel confident knowing that you have the support of our expertise.

Broad Investment Choices

We offer a selection of Saturna no-load mutual funds to meet a variety of investment objectives. By investing in more than one fund, you can tailor your own risk and return objective. In addition to our wide range of Saturna affiliated funds, you can add self-directed brokerage for access to a greater variety of investment vehicles.

Resources

Employer IRA Brochure (includes SEP and SIMPLE)

SEP IRA Application

Form 5305-SEP: Simplified Employee Pension - Individual Retirement Account Contribution Agreement

More IRA Forms

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Contact

For additional assistance, we encourage you to reach out to our Investor Services team by calling 1-800-728-8762