2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More - HR ALERTS

2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More

A quick roundup of the major HSA, FSA, retirement plan, and ACA affordability changes employers need to know for 2026.

HSA Updates for 2026

Contribution Limits

• Self only coverage: $4,400

• Family coverage: $8,750

• Catch up (age 55 plus): $1,000

New for 2026

• Direct Primary Care (DPC) arrangements now count as qualified medical expenses and no longer disqualify HSA eligibility.

• DPC must stay under $150 per month for individuals and $300 per month for families.

• Individuals enrolled in ACA Bronze or Catastrophic plans may contribute if the plan meets deductible and cost sharing rules.

FSA Updates for 2026

Health FSA

• Maximum employee contribution: $3,400

• Carryover limit: $680

Dependent Care FSA

• Maximum contribution (single or married filing jointly): $7,500

• Maximum contribution (married filing separately): $3,750

Important Notes

• Employers may set lower limits.

• Plan documents should be updated before open enrollment.

• Communicate increases early, especially the higher Dependent Care limit which may affect payroll deductions.

Retirement Plan Limits for 2026

401(k), 403(b), 457

• Employee limit: $24,500

• Catch up (ages 50 to 59): $8,000

• Catch up (ages 60 to 63): $12,000

• Total employee and employer limit: $72,000

IRA

• Contribution limit: $7,000

• Catch up: $1,000

SIMPLE IRA

• Employee limit: $17,000

• Catch up: $4,000

Defined Contribution Plan

• Overall limit: $72,000

Roth IRA Income Limits for 2026

Single or Head of Household

• Full contribution: below $153,000

• Partial contribution: $153,000 to $168,000

• No contribution: above $168,000

Married Filing Jointly

• Full contribution: below $242,000

• Partial contribution: $242,000 to $252,000

• No contribution: above $252,000

Married Filing Separately

• Phase out: $0 to $10,000

Roth Contribution Limits

• Under age 50: $7,500

• Age 50 plus: $8,600

ACA Affordability Threshold for 2026

• New affordability limit: 9.96 percent of income

• Up from 9.02 percent in 2025

• This is the maximum employee contribution allowed for self only minimum value coverage to remain ACA compliant.

Get day-to-day updates on 2026 Benefits and Payroll Limits Updates: FSA, HSA, 401K, & More visit the Vida HR Knowledge Center (Vida HR Clients Exclusive).