A SEP plan allows employers to set up SEP IRAs for
themselves and each of their employees. Employers
must contribute a uniform percentage of pay for
each employee, although they do not have to make
contributions every year. Employer contributions are
limited to the lesser of 25 percent of pay or $50,000 in
2012 and $51,000 in 2013. (Note: the dollar amount
is indexed for inflation and may increase.) Most
employers, including those who are self-employed,
can establish a SEP.
SEPs have low start-up and operating costs and can be
established using a two-page form. And you can decide
how much to put into a SEP each year – offering you
some flexibility when business conditions vary.
From:
SEP IRA: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SEPs-Contributions
