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March 26, 2021

Compensation Cap

Your Guide



The compensation cap is the maximum amount of compensation that may be taken into consideration when determining contributions  to employer sponsored retirement plans,  such as SEP IRAs, SIMPLE IRAs, 403(b) arrangements, qualified plans-such as 401(k)-profit sharing and pension plans..

Referring Cite

IRC § 401(a)(17), IRC § 404(l)

Additional Helpful Information

The compensation cap does not apply to SIMPLE IRA matching contributions.


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