Your Simplified Employee Pension Individual Retirement Account (SEP IRA) plan lets you make retirement contributions for eligible employees. Here is how to invite employees, make contributions, and understand contribution limits.
Employees who meet eligibility requirements need to set up a SEP IRA account to get employer contributions. You can invite eligible employees from the Employees section of your dashboard.
To send an invitation, follow these steps:
Sign in to your Gusto SEP IRA dashboard at the Gusto Retirement sign-in page.
Go to the Employees section.
Enter the employee's name and email address to send them an invitation to open an account.
Once an employee sets up an account, you can make contributions through your dashboard.
If an employee declines to set up a SEP IRA with Gusto Retirement, they’re responsible for setting up their own account with a provider of their choice. You’ll need to work with the employee or the other provider to contribute to their account outside of our system.
As the employer, you do not need to invite yourself or add yourself to the roster. Setting up your Gusto SEP IRA also created your own account to get SEP IRA contributions if eligible. You will not appear in the roster.
Note: Adding yourself to the roster creates duplicate information in the plan.
You can make SEP contributions to your employees from your Gusto SEP IRA dashboard.
To make a contribution, follow these steps:
Sign in to your Gusto SEP IRA dashboard at the Gusto Retirement sign-in page.
Select Contributions from the main menu.
Follow the steps to complete the contribution process.
You need to make contributions for all eligible employees in your plan. You established the eligibility rules in Form 5305-SEP when you opened your SEP account.
Important: You need to make all contributions from your company's bank account. Gusto Retirement does not currently integrate with payroll for SEP IRA contributions.
You can read the full rules for SEP contributions on the IRS website.
As the plan sponsor, you decide if and how much to contribute to your SEP plan each year. However, all eligible participants need to get the same percentage of their compensation as a contribution — for example, 3% of compensation. The Internal Revenue Service (IRS) limits the amount they can get.
A participant's SEP IRA contributions cannot exceed the lesser of:
25% of the employee's eligible compensation, limited to the SEP maximum compensation cap that the IRS sets each year
20% of a self-employed individual's net earnings from self-employment for the tax year
The SEP maximum contribution dollar amount limit, which the IRS adjusts for cost of living
The deadline to make SEP IRA contributions is your business's tax return due date, including any extension you filed. If you make a contribution to the SEP IRA, you need to notify eligible employees in writing by Jan. 31 of the following year or 30 days after you made the contribution, whichever is later.
For more information about SEP contributions, visit the IRS website.