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November 26, 2024
Employee Benefit Plan Limits for 2025
Many employee benefits are subject to annual dollar limits that are adjusted for inflation by the IRS each year. The following commonly offered employee benefits are subject to these limits:
- High deductible health plans (HDHPs) and health savings accounts (HSAs)
- Health flexible spending accounts (FSAs)
- 401(k) plans
- Transportation fringe benefit plans
The IRS typically announces the dollar limits that will apply for the next calendar year before the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration is consistent with the new limits.
This Compliance Overview includes a chart of the inflation-adjusted limits for 2025. It also includes the 2024 limits for comparison purposes. Most of these limits increase for 2025. Note that there are some benefit limits that are not indexed for inflation, such as the dependent care FSA limit and the catch-up contribution limit for HSAs.
Unchanged Limits
The following limits stay the same from year to year because they are not indexed for inflation:
- Tax exclusion for dependent care FSA benefits
- Catch-up contributions to an HSA
Increased Limits
- HSA contributions
- HDHP limits for minimum deductibles and out-of-pocket maximums
- Health FSA pre-tax contribution limit
- Health FSA carryover limit
- Monthly limits for transportation fringe benefit plans
- Employees’ elective deferrals to 401(k) plans (pre-tax and Roth)
- Tax exclusion for adoption assistance benefits
2025 Benefit Plan Limits
Links and Resources:
This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2024 Zywave, Inc. All rights reserved.