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Savings Incentive Match Plan
SIMPLE Plan

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The Savings Incentive Match Plan for Employees (SIMPLE plan) is one of the easiest and most convenient qualified retirement plans for small businesses. The SIMPLE plan allows the employer and employee make contributions to a Simple IRA account set up for the employee. Employees can elect to have wages deposited in the Simple-IRA. A self employed person is considered an employee for purposes of plan participation and may make contributions based on their net earnings from self-employment.

Employer requirements:
Must have no more than 100 employees (that earned $5,000 or more in the preceding year)
Employers must EITHER

1) Match employees’ contributions (up to 3% of their pay) OR

2) Contribute 2% of employee’s pay.
Employer cannot start a SIMPLE plan if another qualified plan is maintained.
Employer contributions do not have to be deposited until the due date of your tax return.

Employees must meet the following participation requirements:
Received at least $5,000 in wages in any two prior years, and
Expect to earn at least $5,000 in the current year.

Setting up a SIMPLE plan is fairly straightforward, inexpensive and the administration of the plan is low-maintenance.
View SIMPLE IRA Contribution Limits.