2026 LIMITS FOR EMPLOYEE BENEFIT PLANS Plus 6 Best Practices for Employers
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Retirement Plan Limits
2023
2024
2025
2026
Elective Salary Deferrals - 401(k), 403(b), and 457(b) plans
$22,500
$23,000
$23,500
$24,500
Catch-Up Contributions for Employees Aged 50 or Older* - 401(k), 403(b), and governmental 457(b) plans Higher Catch-Up Contributions for Employees Aged 60, 61, 62 and 63* - 401(k), 403(b), and governmental 457(b) plans Salary Reduction Contributions/Elective Contributions - SIMPLE IRA AND SIMPLE 401(k) plans Catch-Up SIMPLE Contributions for Employees Aged 50 or Older (note: a different limit applies to certain plans) Higher SIMPLE Catch-Up Contributions for Employees Aged 60, 61, 62 and 63 (note: a lower limit applies to certain SIMPLE plans) Annual Compensation Taken Into Account (includes maximum SEP compensation)
$7,500
$7,500
$7,500
$8,000
N/A
N/A
$11,250
$11,250
The IRS rolled out its 2026 retirement plan dollar limits on Nov. 13, marking the final regulatory release of annual adjustments that will impact all kinds of employee benefits next year. Since these updates are scattered throughout the year among different agencies and across various formats, we’ve gathered them all in one place for your convenience. From 401(k) contributions and pre-tax savings for healthcare expenses to ACA penalty amounts and more, we’ve got you covered. Get Ready For The New Year Ahead
$15,500
$16,000
$16,500
$17,000
$3,500
$3,500
$3,500
$4,000
N/A
N/A
$5,250
$5,250
1. Update programs to ensure any plan materials and participant communications reflect the new limits.
$330,000
$345,000
$350,000
$360,000
2. Educate your employees on the new limits and give them an opportunity to boost their participation.
Maximum Benefit for Defined Benefit Plan
$265,000
$275,000
$280,000
$290,000
3. Communicate with your payroll department or provider, as well as your administrative services provider, to ensure the new limits are taken into account when determining contributions. 4. Train your payroll, benefits, and relevant human resources staff on these plan limit changes and ensure they know how these changes will impact plan administration. 5. Confirm that your retirement plans comply with the applicable limits when processing employee contributions and testing for discrimination issues, where applicable. Nondiscrimination testing is required for certain plans to ensure that highly compensated employees (HCE) do not disproportionately benefit from employer retirements plans and that contribution limits are not exceeded. 6. Keep written documentation on any plan updates, employee education and training, communications with third-party providers, and any other plan actions or decisions as part of your fiduciary responsibilities.
Maximum Annual Addition for Defined Contribution Plan
$66,000
$69,000
$70,000
$72,000
Pay Threshold to Determine HCE Status
$150,000
$155,000
$160,000
$160,000
Officer Pay Threshold To Determine Key Employee Status Minimum Compensation for Participation in Simplified Employee Pension Plan ESOP – Amount Used to Determine the Lengthening of the Five-Year Distribution Period ESOP – Amount for Determining the Maximum Account Balance Subject to the Five-Year Distribution Period
$215,000
$220,000
$230,000
$235,000
$750
$750
$750
$800
$265,000
$275,000
$280,000
$290,000
$1,380,000 $1,415,000
$1,455,000
$1,330,000
* NEW FOR 2026: Catch-up contributions made in 2026 must be designated as Roth contributions if the employee’s FICA wages in 2025 exceeded $150,000. This Roth catch-up requirement does not apply to simplified employee pension, SIMPLE IRA, or SIMPLE 401(k) plans.
Miscellaneous Limits
Health Plan Limits
2023
2024
2025
2026
2023
2024
2025
2026
Social Security Taxable Wage Base (OASDI) Qualified Transportation Fringe Benefit (transit pass, van pool, and qualified parking) - Monthly Limit
$160,200
$168,600
$176,100
$184,500
$300
$315
$325
$340
ACA Annual Out-of-Pocket Maximum (self/family coverage) High-Deductible Health Plan – IRS Minimum Deductible (self/family coverage) HDHP Annual Out-of-Pocket Maximum (self/family coverage) Health Savings Account Contribu- tions (HDHP self/family coverage) HSA Catch-Up Contributions for Employees Aged 55 or Older Health Flexible Spending Account Contributions Health FSA Maximum Carryover Amount
$9,100/ $18,200 $1,500/ $3,000 $7,500/ $15,000 $3,850/ $7,750
$9,450/ $18,900 $1,600/ $3,200 $8,050/ $16,100 $4,150/ $8,300
$9,200/ $18,400 $1,650/ $3,300 $8,300/ $16,600 $4,300/ $8,550
$10,600/ $21,200 $1,700/ $3,400 $8,500/ $17,000 $4,400/ $8,750
$1,000
$1,000
$1,000
$1,000
$3,050
$3,200
$3,300
$3,400
$610
$640
$660
$680
Conclusion
Dependent Care FSA
$5,000 per household or $2,500 if married, filing separately
$5,000 per household or $2,500 if married, filing separately
$5,000 per household or $2,500 if married, filing separately
$7,500 per household or $3,750 if married, filing separately
If you have questions about benefits compliance, strategies, or best practices, feel free to reach out to your Fisher Phillips attorney, the authors of this Insight, or any attorney in our Employee Benefits and Tax Practice Group. We will continue to provide tips, guidance, and updates on employee benefits and other workplace law topics, so make sure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information directly to your inbox.
ACA Affordability Safe Harbor
9.12%
8.39%
9.02%
9.96%
ACA Penalty for Failure to Offer Coverage (IRC § 4980H(a)) for 12 Months
$2,880
$2,970
$2,900
$3,340 per full- time employee (excluding first 30 FTEs) $5,010 per full- time employee who received a premium tax credit
Jennifer S. Kiesewetter
Of Counsel, Nashville/Memphis Member, Employee Benefits and Tax Practice Group jkiesewetter@fisherphillips.com
ACA Penalty for Offering Coverage That Fails to Meet Affordability or Minimum Value Requirements (IRC § 4980H(b)) for 12 Months
$4,320
$4,460
$4,350
Katie Reynolds
Associate, Boston krreynolds@fisherphillips.com
2026 Employee Benefit Limits fisherphillips.com
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