Home SIMPLE IRA Plan setup What are the types of employer contributions for a SIMPLE IRA plan?

What are the types of employer contributions for a SIMPLE IRA plan?

Last updated on Sep 17, 2024

At WealthRabbit, we offer two different types of contributions for your SIMPLE IRA plan:

  1. 3% Dollar-to-Dollar Matching Contribution: In this contribution method, the employer shall match the employee's elective deferral on a dollar-to-dollar basis, not exceeding 3% of the employee's compensation.  However, the employer has the option to reduce the matching contribution for two years during a five-year period.

  2. 2% Non-Elective Contribution: In this contribution method, the employer shall contribute 2% of the employee's compensation, regardless of whether the eligible employee chooses to make a salary deferral contribution.

Note: In both cases mentioned above, the employer can contribute a maximum of 3% of the employee's compensation.