Excerpt: SARSEPs are still not as good as section 401(k) plans after EGTRRA and the technical corrections. Compensation for the employee's 25% exclusion from income limit is still determined after subtracting the deferrals and [the 25% exclusion limit] includes both the deferrals and the employer's regular SEP contributions. This means that the employer's deduction limit is actually higher than the maximum that the employee can receive and exclude from current income.