IRS Releases Employee Benefit Plan Limits for 2025

Many employee benefits are subject to annual dollar limits that are updated for inflation before the beginning of each calendar year. Most of these annual dollar limits increase for 2025. Note that some benefit limits are not adjusted for inflation, such as the contribution limit for dependent care flexible spending accounts (FSAs) and the catch-up contribution limit for health savings accounts (HSAs).

Employers should confirm that payroll systems are updated for the 2025 limits and that the new limits are communicated to employees. The following benefit limits apply for 2025:

HSA Contributions

• Single coverage: $4,300 (up $150 from 2024);
• Family coverage: $8,550 (up $250 from 2024); and
• Catch-up contributions: $1,000

Health FSA Limits

• Employee pre-tax contributions: $3,300 (up $100 from 2024); and
• Carryover of unused funds: $660 (up $20 from 2024)

Dependent Care FSA Contributions

• $5,000 or $2,500 if married and filing taxes separately

401(k) Contributions

• Employee elective deferrals (pre-tax and Roth contributions): $23,500 (up $500 from 2024); and
• Catch-up contributions: $7,500 (no change from 2024); starting in 2025, a higher catch-up contribution limit ($11,250) applies to participants ages 60-63

Transportation Fringe Benefits

• Monthly limits: $325 (up $10 from 2024)

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