In 2015, an individual may defer up to $12,500 of his or her salary to a SIMPLE IRA, according to IRS.gov. An employee over the age of 50, however, may make a "catch-up contribution" of an additional $3,000, bringing his or her total allowable contribution in 2015 to $15,500.Continue Reading
Employee contributions to a SIMPLE IRA are done by salary reduction. This is the only way an employee can make a contribution to a SIMPLE IRA, as stated by IRS.gov. A SIMPLE IRA plan is a way for small employers to offer their employees a means of saving for their retirement. Each employee may make a salary reduction contribution, and the employer must make either a matching contribution or a non-elective contribution.
These are the only types of contributions that can be made to a SIMPLE IRA plan, explains the IRS. Generally, employers are required to either match their employee’s contributions dollar for dollar or make non-elective contributions of up to 2 percent of their employee’s compensation, up to an annual limit, which is $265,000 in the year 2015.Learn more about Financial Planning