Many employee benefits are subject to annual dollar limits that are updated for inflation before the beginning of each calendar year. Note that some benefit limits are not adjusted for inflation, such as the catch-up contribution limit for health savings accounts (HSAs). Although the contribution limit for dependent care flexible spending accounts (FSAs) is not indexed for inflation, the One Big Beautiful Bill Act increased the limit, effective for 2026.
Employers should confirm that payroll systems are updated for 2026 limits and that the new limits are communicated to employees. The following benefit limits apply for 2026:
HSA Contributions
- Single coverage: $4,400 (up $100 from 2025);
- Family coverage: $8,750 (up $200 from 2025); and
- Catch-up contributions: $1,000
Health FSA Limits
- Employee pre-tax contributions: $3,400 (up $100 from 2025); and
- Carryover of unused funds: $680 (up $20 from 2025)
Dependent Care FSA Contributions
- $7,500 or $3,750 if married and filing taxes separately (up from prior years’ limit of $5,000 and $2,500, respectively)
401(k) Contributions
- Employee elective deferrals (pre-tax and Roth contributions): $24,500 (up $1,000 from 2025);
- Catch-up contributions: $8,000 (up $500 from 2025). A higher catch-up contribution limit ($11,250, no change from 2025) applies to participants ages 60-63; and
- FICA wage threshold for Roth catch-up contribution mandate: $150,000 (new requirement for 2026)
Transportation Fringe Benefits
Monthly limits: $340 (up $15 from 2025)
The information in this newsletter is intended for informational use only and should not be construed as professional advice. © 2025 Zywave, Inc. All rights reserved.
