2026 Contribution Limits: Retirement, FSA, HSA, and Commuter Benefits
Quick look: As another year comes to an end, updated contribution limits for retirement plans, health savings accounts (HSAs), flexible spending accounts (FSAs), and commuter benefit programs for 2026 have arrived. Check out the latest IRS figures below, which employers and employees can refer to as they adjust their benefits plans for the new year.
The holidays are rapidly approaching, and before we know it, 2026 will be here. With the new year so close, the Internal Revenue Service (IRS) has announced new contribution limits for retirement accounts, health savings accounts (HSAs), flexible savings accounts (FSAs), and commuter benefit plans.
With inflation still top of mind and rates about half a percentage point higher year-over-year, many Americans are feeling the pinch. According to Bank of America’s latest annual Workplace Benefits Report, 47% of U.S. employees rate their financial wellness as good or excellent, yet 88% are stressed about the current economic climate. Saving for retirement remains a top financial goal, but only one-third are saving for future health care expenses. Sharing next year’s contribution limits now could encourage more employees to follow suit.
The following contribution limit updates take effect January 1, 2026, and will enable employees to save additional funds for their retirement years, more affordably tend to their health, and save on their work commutes.
2026 retirement contribution limits
The IRS has announced that the contribution limit for workers who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will increase from $23,500 to $24,500.
The annual contribution limit for IRAs will rise to $7,500, after it remained at $7,000 for two years in a row. The IRA catch‑up contribution limit for employees aged 50 and up will stay $1,100 (a figure amended under the SECURE 2.0 Act to adjust for the cost of living).
The catch-up contribution limit for individuals aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will jump from $7,500 in 2025 to $8,000 in 2026. This brings the annual total that participants in these plans can contribute to $32,500 starting in 2026. The catch-up contribution limit for employees aged 50 and over participating in most SIMPLE plans will rise to $4,000, up from $3,500 in 2025.
The eligible income ranges will increase in 2026 for making deductible contributions to traditional IRAs, contributing to Roth IRAs, and claiming the Saver’s Credit.
Per the IRS, “Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)”
Below are the 2026 phase-out ranges for traditional IRAs:
- Single taxpayers covered by a workplace retirement plan: The phase-out range will increase to between $81,000 and $91,000 (up from between $79,000 and $89,000).
- Married couples filing jointly: If the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range will rise to between $129,000 and $149,000 (up from between $126,000 and $146,000).
- IRA contributors who aren’t covered by a workplace retirement plan and are married to someone who is covered: The phase-out range will jump to between $242,000 and $252,000 (up from between $236,000 and $246,000).
- Married individuals filing separately who are covered by a workplace retirement plan: The phase-out range isn’t subject to an annual cost-of-living adjustment and will remain between $0 and $10,000.
For Roth IRAs, the following phase-out ranges will apply:
- Singles or heads of household who contribute to a Roth IRA: The phase-out range will grow to between $153,000 and $168,000 (up from between $150,000 and $165,000).
- Married couples filing jointly: The income phase-out range will increase to between $242,000 and $252,000 (up from between $236,000 and $246,000).
- Married individuals filing separately who contribute to a Roth IRA: The phase-out range isn’t subject to an annual cost-of-living adjustment and will remain between $0 and $10,000.
Below are the income limits for the Saver’s Credit (aka the Retirement Savings Contribution Credit) for low- and moderate-income workers:
- Married filing jointly: $80,500, up from $79,000.
- Heads of household: $60,375, up from $59,250.
- Singles and married individuals filing separately: $40,250, up from $39,500.
Additionally, the amount individuals can contribute to their SIMPLE retirement accounts will rise to $17,000, up from $16,500.
2026 FSA contribution limits
FSAs will also experience larger contribution limits next year. These accounts can help lower medical and/or dependent care expenses, pay for deductibles, co-pays, and coinsurance, and preschool, day camp, or after-school programs.
In 2026, participants can add an extra $100 to their FSAs as the annual contribution limit rises to $3,400 (up from $3,300). If the FSA plan allows unused FSA amounts to carry over, employees can carry over up to $680 (up from $660).
Read IRS Revenue Procedure 2025-32 >
2026 HSA contribution limits
Participants enrolled in a qualified high-deductible health plan (HDHP) are eligible to defer funds into an HSA. These accounts allow employees to set aside pre-tax money from their paychecks to help pay for eligible medical, dental, or vision expenses not covered by their health plans.
In 2026, an HDHP must have a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. Additionally, annual out-of-pocket expense maximums can’t exceed $8,500 for self-only coverage or $17,000 for family coverage.
The limit for self-only HSA coverage will be $4,400; for family coverage, the limit will be $8,750. Those aged 55 and up will be able to contribute an extra $1,000 to their HSAs.
The IRS also announced the maximum amount employers can contribute to an excepted-benefit health reimbursement arrangement (HRA) in 2025 will be $2,200 (up from $2,150 in 2025).
Read IRS Revenue Procedure 2025-19 >
| 2026 | 2025 | Change | |
|---|---|---|---|
| HSA contribution limit (employer + employee) | Self-only: $4,400 Family: $8,750 |
Self-only: $4,300 Family: $8,550 |
Self-only: +$100 Family: +$20 |
| HSA catch-up contributions (age 55+) | $1,000 | $1,000 | No change (set by statute) |
| HDHP minimum deductibles | Self-only: $1,700 Family: $3,400 |
Self-only: $1,650 Family: $3,300 |
Self-only: +$50 Family: +$100 |
| HDHP maximum out-of-pocket amounts (deductibles, co-payments, and other amounts, but not premiums) | Self-only: $8,500 Family: $17,000 | Self-only: $8,300 Family: $16,600 | Self-only: +$200 Family: +$400 |
2026 commuter benefits limits
Commuter benefits, also known as qualified transportation fringe benefits, can help employees reduce expenses incurred while commuting to and from work. Employees may contribute to their commuter benefits plans (CBPs) on a pre-tax basis and use the funds to pay for eligible mass transit or parking expenses.
In 2026, employees can contribute $340 per month to their CBP, up from $325 in tax year 2025.
Read IRS Revenue Procedure 2025-32 >
Stay ahead of benefits changes with the right HR partner
As contribution limits shift once again in 2026, small and midsized businesses (SMBs) face the ongoing challenge of staying compliant, competitive, and aligned with employee needs. For many of these companies, tracking IRS updates, adjusting payroll and benefits systems, communicating changes to staff, and ensuring plans consistently meet requirements can quickly become overwhelming.
This is where a professional employer organization (PEO) comes into play. For instance, partnering with ExtensisHR gives SMBs access to a team of benefits experts, large-group, Fortune 500-level buying power, and administrative support that simplifies every aspect of benefits management. With ExtensisHR, employers can:
- Better understand and implement annual IRS updates for retirement, HSA, FSA, and commuter benefits
- Offer more competitive, cost-effective benefits typically only available to large organizations
- Seamlessly manage enrollment, compliance, and employee communications
- Reduce administrative time so internal teams can refocus on strategic priorities
- Provide quick, reliable support for employees’ benefits questions, with a customer service team that answers the phone in under 15 seconds
With 2026 approaching and contribution limits increasing across several key programs, now is the perfect time to evaluate whether your current offerings meet workforce expectations. A partner like ExtensisHR can help your business remain compliant, offer attractive and affordable plans, and support employees’ financial well-being, in the new year and beyond.
Want to learn more about how a PEO can help your employees make the most of their earnings? Learn more about ExtensisHR’s benefits solutions or contact our team today.
Disclaimer: This blog is for informational purposes only and is not intended as financial, tax, or legal advice. Please consult a qualified professional for guidance specific to your situation.
