Chapter 15 - SIMPLE IRA Plans Compensation SIMPLE contributions and deductions are based on the compensation received from the employer by the employee during the calendar year. [IRC §408(p)(6)(C)] For an employee, compensation is the Form W-2 wages plus elective deferrals. [IRC §408(p)(6)(A)(i); Notice 98-4, Q&A C-4 " ] SIMPLE contributions and deductions are based on the compensation received from the employer by the employee during the calendar year. [IRC §408(p)(6)(C)] For an employee, compensation is the Form W-2 wages plus elective deferrals. [IRC §408(p)(6)(A)(i); Notice 98-4, Q&A C-4 " ] IRA Digital Reference Manual © PMC