What are SEP contributions based on?

For a self employed individual, are after paying himself a salary, there is only a small profit left over. Are SEP contributions based on the salary or the profits to the business?17

Thank you.



An S Corp paying a W-2 salary will result in the SEP IRA contributions being limited to 25% of the W-2 salary, but no more than 52k for 2014.

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