SIMPLE Plans
Savings Incentive Match PLan for Employees (SIMPLE) plans are retirement plans for businesses having no more than 100 employees. With a SIMPLE IRA or SIMPLE 401(k), the employee may make pre-tax contributions to the plan. The contribution is expressed as a percentage of the employee’s compensation and is limited to $14,000 a year for 2022, with employees aged 50 and over allowed to contribute an additional $3,000. For 2023 the limit is $15,500, with employees aged 50 and over allowed to contribute an additional $3,500. The employer is required to either match these contributions up to 1% to 3% of the employee’s compensation or to contribute 2% whether the employee makes a contribution or not. The employer chooses which type of contribution (and if matching, the maximum percentage it will match). This choice applies to all employees. So an employer who chooses matching contribu