Is your SEP-IRA contribution based on net or gross?

SEP-IRA contributions are based on net earnings from self-employment, not gross income. Specifically, the calculation considers your net profit after deducting business expenses and the deductible portion of self-employment taxes. This means that you take your net earnings and apply the appropriate contribution percentage, which can be up to 25% for employer contributions. Always consult a tax professional for personalized guidance.