Basically, there are two options. A SEP or SEP-IRA and a SIMPLE plan. SEP stands for Simplified Employee Pension, and may be used to fund an IRA for the business owner and employees. Hence, it is frequently referred to as a SEP-IRA plan. Limits are 25% of an employee's compensation, not to exceed $53,000. The record-keeping and reporting requirements are simpler than for a 401(k) plan. SIMPLE stands for Savings Incentive Match Plans for Employees. It differs from a SEP in that employees are required to contribute to the plan. It is also an IRA. Employees may contribute up to $12,500 and employers match up to 3% of the employee's income, not to exceed $5,300..