What is the maximum a participant can defer from pay. I have a ER that insists 15% to $30K. I am thinking it's 15% to $10,500.00 for plan year end 12/31/2000.

There is no ER money in this plan.

Deferrals to SEP are subject to the $10,500.00 limit.

I agree with the last response. The $30,000 limit refers to all annual additions (deferrals, match, and/or profit sharing).

This discussion can get complicated and confusing when you are talking to the sole owner of a small business. It is hard for them to distinguish between deferral, match, and profit sharing conceptually because it all comes from the same pocket - theirs!

Since frequently the owners paycheck is a function of whatever is left on table after all other expenses and contributions, ALL contributions to a plan, whatever source, are viewed as "salary reduction".

Anyway, I hope I didn't muddy this up more than I clarified. I just wanted to share the experience that I have run accross frequently when dealing with owners of small businesses. Choose your words very carefully.