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The Internal Revenue Service (IRS) has issued the cost-of-living adjustments applicable to employee benefit plans for 2026. A year-to-year comparison of these adjustments is available below.
As in prior years, the IRS has adjusted numerous benefit plan limits to account for inflation and increased certain limits based on a cost-of-living index. Relevant adjustments include increases to limitations for qualified retirement plans such as the contribution limit (section 415 limitation) for defined contribution plans, which increased from $70,000 to $72,000. The annual compensation limit for purposes of Internal Revenue Code Section 401(a)(17) also increased from $350,000 to $360,000 (from $520,000 to $535,000 for certain governmental plans). Additionally, the limit on elective deferrals to 401(k) plans increased from $23,500 to $24,500.
Notably, the IRS increased the wage threshold for the requirement that catch-up contributions be designated as Roth contributions, which comes into effect January 1, 2026. The SECURE 2.0 Act of 2022 provided that an individual whose Federal Insurance Contributions Act (FICA) wages exceeded $145,000 in the prior year will only be permitted to make catch-up contributions as designated Roth contribution. However, in its cost of living adjustments, the IRS has raised this threshold to $150,000 in prior-year wages. Also with regard to catch-up contributions, the limit for individuals age 50 and older has increased, rising to $8,000 after remaining unchanged at $7,500 since 2023. For individuals who turn 60-63 in 2026 and are thus eligible to make "super catch-ups," however, the catch-up contribution limit remains unchanged at $11,250.
The IRS also increased several limits applicable to health and welfare plans. For example, the maximum annual contribution to a health savings account (HSA) increased from $4,300 to $4,400 for single filers, and from $8,550 to $8,750 for families. Limits on reimbursements under Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) increased from $6,350 to $6,450 for self-only coverage, and $12,800 to $13,100 for family coverage. Moreover, after remaining unchanged for several years, the maximum contribution to a Dependent Care FSA increased from $5,000 to $7,500 per household (or $2,500 to $3,750 if married filing separately) pursuant to the One Big Beautiful Bill Act, which was signed into law on July 4, 2025.
The Social Security wage base increased from $176,100 to $184,500, which is similar to the increase last year.
ANNUAL LIMITATIONS
Effective as of January 1, 2026
Generate PDF of Annual Limitations Chart
| LIMIT | 2026 | 2025 | 2024 |
|---|---|---|---|
| Elective Deferrals IRC Section: 402(g)(1), 457(e)(15), 408(p)(2)(E) 401(k), 403(b), 457(b), and SEPs SIMPLE Plans |
$24,500 $17,000 |
$23,500 $16,500 |
$23,000 $16,000 |
| Catch-up Contributions (age 50 and
older)* IRC Section: 414(v)(2)(B)(i) & (ii), 414(v)(7)(A) 401(k), 403(b), Governmental 457(b), and SEPs SIMPLE Plans Roth catch-up threshold (prior year FICA wages)** |
$8,000 $4,000 $150,000 |
$7,500 $3,500 $145,000 |
$7,500 $3,500 N/A |
| Annual Compensation Limit IRC Section: 401(a)(17), 404(l) General Limit Certain Governmental Plans |
$360,000 $535,000 |
$350,000 $520,000 |
$345,000 $505,000 |
| Limitations on Benefits and
Contributions IRC Section: 415(b)(1)(A), 415(c)(1)(A) Defined Contribution Plans Defined Benefit Plans |
$72,000 $290,000 |
$70,000 $280,000 |
$69,000 $275,000 |
| "Highly Compensated Employee"
Definition IRC Section: 414(q)(1)(B) |
$160,000 | $160,000 | $155,000 |
| "Key Employee" / "Officer,"
Top-Heavy Plans IRC Section: 416(i)(1)(A)(i) |
$235,000 | $230,000 | $220,000 |
| Pension-Linked Emergency Savings
Accounts IRC 402A(e)(3)(A)(i) |
$2,600 | $2,500 | $2,500 |
| PBGC Guaranteed Annual Benefit (single life annuity payable at age 65; rounded) |
$93,477 | $89,182 | $85,295 |
| SEP Coverage IRC Section: 408(k)(2)(C), 408(k)(3)(C) Minimum/Maximum Compensation |
$800/$360,000 | $750/$350,000 | $750/$345,000 |
| Health Savings Accounts (HSAs) Maximum Annual Contributions Minimum Deductible Maximum Out-of-Pocket Catch-up Contribution (age 55 and older) |
Single: $4,400 $1,700 $8,500 $1,000 Family: $8,750 $3,400 $17,000 $1,000 |
Single: $4,300 $1,650 $8,300 $1,000 Family: $8,550 $3,300 $16,600 $1,000 |
Single: $4,150 $1,600 $8,050 $1,000 Family: $8,300 $3,200 $16,100 $1,000 |
| Qualified Small Employer Health Reimbursement
Arrangements (QSEHRAs) Maximum Annual Reimbursements Single Family |
$6,450 $13,100 |
$6,350 $12,800 |
$6,150 $12,450 |
| Excepted Benefit Health Reimbursement
Arrangements*** Maximum Annual Reimbursements |
$2,200 | $2,150 | $2,100 |
| Health Care Flexible Spending Account Maximum (per employee per unrelated employer) Salary Reduction Contributions Carry-over to Next Plan Year |
$3,400 $680 |
$3,300 $660 |
$3,200 $640 |
| Dependent Care Assistance Maximum Per Household Married Filing Separately |
$7,500 $3,750 |
$5,000 $2,500 |
$5,000 $2,500 |
| Qualified Transportation Fringe
(Monthly) Parking and Mass Transit Pass/Vanpool |
$340 | $325 | $315 |
| Adoption Assistance Programs Maximum Exclusion per Child Phase-Out Floor Phase-Out Ceiling |
$17,670 $265,080 $305,080 |
$17,280 $259,190 $299,190 |
$16,810 $252,150 $292,150 |
| Long-Term Care Deductible Premiums Age 40 and younger Age 41 to 50 Age 51 to 60 Age 61 to 70 Over age 70 |
$500 $930 $1,860 $4,960 $6,200 |
$480 $900 $1,800 $4,810 $6,020 |
$470 $880 $1,760 $4,710 $5,880 |
| Total FICA Tax (Combined OASDI and HI
Portions) Employees and Employers, each 7.65%**** |
7.65%**** | 7.65%**** | 7.65%**** |
| FICA Taxes (HI Portion) Employees and Employers, each (all wages) |
1.45%**** | 1.45%**** | 1.45%**** |
| Social Security Tax (OASDI Portion) Employees and Employers, each Wage Base |
6.2% $184,500 |
6.2% $176,100 |
6.2% $168,600 |
* For individuals who attain 60-63 in 2026, the catch-up
contribution limit remains $11,250 for most 401(k), 403(b),
governmental 457(b) plans, and SEPs, and $5,250 for SIMPLE
plans.
** Effective January 1, 2026, individuals who earned in excess of
the wage threshold in the prior year from an employer must make
catch-up contributions to an applicable employer plan (other than a
plan described in Section 408(k) or (p)) as designated Roth
contributions. Applicable wages are an individual's prior year
wages as defined under IRC 3121(a). See IRC 414(v)(7), 90 Fed. Reg.
44527.
*** Effective January 1, 2020, an Excepted Benefit HRA can be used
to reimburse the costs of certain §213(d) medical expenses for
eligible employees.
**** Higher-income employees will be subject to an additional 0.9%
Medicare tax on wages in excess of threshold amounts based on
filing status as listed in the table below. Employers are required
to withhold the 0.9% Medicare tax on wages paid to an employee in
excess of $200,000 without regard to filing status.
| FILING STATUS | THRESHOLD AMOUNT |
|---|---|
| Married filing jointly | $250,000 |
| Married filing separately | $125,000 |
| Single; Head of Household (with qualifying person); or Qualifying widow(er) with dependent child | $200,000 |
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