Health accounts and the wage base

2027 Benefit and Payroll Limits

Three sets of limits that decide what a paycheck looks like move on three different schedules, and for 2027 all three are now settled. Health savings account amounts were published in the spring, the Social Security wage base was announced by the Social Security Administration, and the flexible spending and fringe figures arrived with the tax inflation release in November.

This page collects them in one place, because in practice they are used together. A benefits election made in January needs the health savings account figure, the deductible threshold that decides whether a plan qualifies at all, and the wage base that silently caps Social Security withholding for anyone earning above it.

Health savings accounts in 2027

The contribution ceiling rises to $4,500 for self-only coverage and $9,000 for family coverage. The $1,000 catch-up available from age 55 is unchanged, because it is written into the statute rather than indexed, which is why it has stayed at the same figure for years while everything around it moved.

The account is only available alongside a qualifying high-deductible plan, and those thresholds moved too. A 2027 plan must carry a deductible of at least $1,750 for self-only coverage or $3,500 for family coverage, and out-of-pocket exposure no higher than $8,700 or $17,400 including co-payments but excluding premiums.

Both halves of that test matter. A plan with a deductible high enough to qualify but out-of-pocket exposure above the ceiling does not qualify, and an account holder who contributes on the assumption that it does faces an excess contribution and an excise tax on the difference. The two thresholds are published together for that reason.

The Social Security wage base

The wage base for 2027 is $192,300, up from $184,500. This is the figure that caps the 6.2% Social Security tax an employee pays and the 12.4% self-employment equivalent, and it is the reason the Social Security line on a pay stub can vanish partway through the year.

The practical effect is a ceiling on withholding that arrives earlier for higher earners. Once year-to-date wages pass the base, only Medicare continues to be withheld, so a December paycheck can be visibly larger than November's for an unchanged salary. Employees who change jobs mid-year often overpay temporarily, because each payroll system applies the cap independently and only the annual return reconciles the total.

This figure is announced by the Social Security Administration rather than the IRS, and it is tied to the national average wage index rather than to consumer prices. That is why it can move by a different percentage than the tax brackets in the same year, and why a taxpayer whose salary rises with inflation may still cross the base sooner than expected.

Flexible spending and fringe amounts

The health flexible spending arrangement salary reduction limit rises to $3,500, with a carryover maximum of $700 where the plan permits unused amounts to roll forward. The monthly limit for qualified transportation and parking rises to $350.

These figures travel with the tax brackets rather than with the health account figures, because they are set in the same autumn inflation release. That timing matters for open enrolment: an employer running enrolment in October may have the fringe amounts before the retirement plan limits are known.

Why the three schedules differ

Health savings account amounts are published by revenue procedure in the spring, months before the plan year begins, because employers need them to set contribution elections during autumn enrolment. The wage base comes from wage data and is announced separately by the Social Security Administration. Tax brackets and the fringe limits arrive in the autumn inflation release.

The consequence is that a benefits summary assembled in November can be complete for health accounts and still incomplete for retirement plans, because the retirement contribution limits are typically announced later in the same month. Anyone reading a page like this one should check which of the three has actually been published rather than assuming they arrive together.

What is not published yet

The 2027 limits for 401(k), 403(b), governmental 457 plans and IRAs had not been announced when this page was last checked. Projections circulate widely and are usually close, but a projection is not a limit, and publishing one as though it were would be the single easiest way to give a reader a wrong number in a year when the correct one is only weeks away.

Until the notice is issued, the 2026 figures remain in force and are the ones a payroll system will apply in January. The retirement contribution page on this site carries those 2026 amounts and will be updated when the announcement is made.

How to use these figures before January

Three elections are worth reviewing now. The health savings account contribution should be set so that the annual total lands at or below $4,500 or $9,000 depending on coverage, with the catch-up added separately for anyone over 55. The flexible spending election should be sized against the $3,500 limit, remembering that only $700 can carry forward. And anyone paid above the wage base should expect Social Security withholding to stop in the final months of the year, which is a cash flow change rather than a tax saving.

Questions about these changes

Calculators that apply these figures