The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2025 and 2026.*

RETIREMENT PLAN LIMITS (guidance link)	2025		2026
Annual compensation limit	$350,000	↑	$360,000
401(k), 403(b), and 457(b) before-tax contributions	$23,500	↑	$24,500
Catch-up contributions (if age 50 or older)	$7,500	↑	$8,000
Catch-up contributions (individuals who attain age 60, 61, 62, or 63 in 2026)	$11,250	=	$11,250
Limit on compensation in prior year requiring catch-up contributions to be Roth	N/A		$150,000
Limit on contributions to emergency savings accounts in defined contribution plans	$2,500	↑	$2,600
In-service withdrawal for victims of domestic abuse limit	$10,300	↑	$10,500
Highly compensated employee threshold	$160,000	=	$160,000
Key employee officer compensation threshold	$230,000	↑	$235,000
Defined benefit plan annual benefit and accrual limit	$280,000	↑	$290,000
Defined contribution plan annual contribution limit	$70,000	↑	$72,000
Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period	$280,000	↑	$290,000
ESOP limit for determining the maximum account balance subject to the general five-year distribution period	$1,415,000	↑	$1,455,000
HEALTH AND WELFARE PLAN LIMITS (guidance links here, here, and here)	2025		2026
Health Flexible Spending Accounts
Maximum salary reduction limit	$3,300	↑	$3,400
Health FSA Carryover Limit	$660	↑	$680
Dependent Care Flexible Spending Accounts±
If employee is married and filing a joint return or if the employee is a single parent	$5,000	↑	$7,500
In employee is married but filing separately	$2,500	↑	$3,750
Excepted Benefit Health Reimbursement Arrangements (EBHRAs)	$2,150	↑	$2,200
Qualified Transportation Fringe Benefit and Qualified Parking (monthly limit)	$325	↑	$340
High-Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)
HDHP – Maximum annual out-of-pocket limit (excluding premiums):
Self-only coverage	$8,300	↑	$8,500
Family coverage	$16,600	↑	$17,000
HDHP – Minimum annual deductible:
Self-only coverage	$1,650	↑	$1,700
Family coverage	$3,300	↑	$3,400
HSA – Annual contribution limit:
Self-only coverage	$4,300	↑	$4,400
Family coverage	$8,550	↑	$8,750
Catch-up contributions (age 55 or older)±	$1,000	=	$1,000
Direct Primary Care Monthly Membership Fee
Self-Only Coverage	N/A		$150
Family Coverage	N/A		$300
SOCIAL SECURITY WAGE BASE (guidance link)	2025		2026
Social Security Maximum Taxable Earnings	$176,100	↑	$184,500

Plan sponsors should update payroll and plan administration systems for the 2026 cost-of-living adjustments and incorporate the new limits into relevant participant communications, like open enrollment materials and summary plan descriptions.

For further information about applying the new employee benefit plan limits for 2026, contact your regular McDermott Will & Schulte lawyer or one of the authors below.

* The dollar limits are generally applied on a calendar year basis; however, certain dollar limits are applied on a plan-year, tax-year, or limitation-year basis.
± Not indexed for cost-of-living adjustments, with the exception of limited guidance issued for certain years.