Employee Benefit Plan Limits for 2023

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; and 
  • Transportation fringe benefit plans.

The IRS typically announces the dollar limits that will apply for the next calendar year well 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 2023. Due to high rates of inflation, all of these limits will substantially increase for 2023. 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.

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

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

LINKS AND RESOURCES

Limit20222023Change
HSA Contribution Limit
Self-only$3,650$3,850Up $200
Family$7,300$7,750Up $450
Catch-up Contribution$1,000$1,000No change
HDHP Minimum Deductible
Self-only$1,400$1,500Up $100
Family$2,800$3,000Up $200
HDHP Out-of-Pocket Maximum
Self-only$7,050$7.500Up $450
Family$14,100$15,000Up $900
Health FSA
Limit on employees’ pre-tax contributions$2,850$3,050Up $200
Carryover limit$570$610Up $40
Dependent Care FSA
Tax Exclusion$5,000 ($2,500 if married and filing taxes separately$5,000 ($2,500 if married and filing taxes separatelyNo change
Transportation Fringe Benefits (Monthly Limits)
Transit pass and vanpooling (combined)$280$300Up $20
Parking$280$300Up $20
401(k) Contributions
Employee elective deferrals$20,500$22,500Up $2,000
Catch-up contributions$6,500$7,500Up $1,000
Limit on total contributions$61,000$66,000Up $5,000
Adoption Assistance Benefits
Tax exclusion$14,890$15,950Up $1,060

*Limits that are not adjusted for inflation