2026 Contribution Limits: What Employers Need to Know

| written by Jennifer Woo Burns, principal Attorney

Plan ahead for retirement and benefit updates

The IRS has announced the official contribution limits for 2026, and employers should review their payroll and benefits policies now to ensure compliance and help employees maximize their tax-advantaged savings. Here are the key updates:

401(k) and Retirement Plans

  • Employee contribution limit: $24,500 (up from $23,500 in 2025)
  • Catch-up contribution (age 50+): $8,000
  • Special catch-up for ages 60–63: $11,250
  • Participants age 50 and older can contribute up to $32,500 in 2026.
  • Total defined contribution plan limit: $72,000
  • IRA contribution limit: $7,500; IRA catch-up: $1,100 (total $8,600 for age 50+)

Health Savings Account (HSA) Limits

HSAs allow individuals covered under a qualified high-deductible health plan to save pre-tax dollars for medical expenses. For 2026:

  • Self-only coverage: $4,400
  • Family coverage: $8,750

Flexible Spending Account (FSA) Limits

Employees can contribute up to $3,400 annually to a health FSA in 2026. For plans that allow carryover, the maximum carryover amount is $680.

Dependent Care FSA limits remain significantly higher than prior years at $7,500 per household (or $3,750 for married filing separately).

Why this matters

Updating these figures in your payroll systems and employee communications helps avoid compliance issues and supports employees in planning for the year ahead.

If you have questions about implementing these changes or need assistance with policy updates, Scali Rasmussen is here to help you navigate 2026 with confidence.