What are the Employee Benefits Limits for 2023?

Nov 7, 2022

2023 employee benefitsMany 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 Employee Benefit 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 Employee Benefit 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

Employee Benefit Plan Limits for 2023

Limit 2022 2023 Change

HSA Contribution Limit

Self-only $3,650 $3,850 Up $200
Family $7,300 $7,750 Up $450
Catch-up contributions* $1,000 $1,000 No change

HDHP Minimum Deductible

Self-only $1,400 $1,500 Up $100
Family $2,800 $3,000 Up $200

HDHP Out-of-Pocket Maximum

Self-only $7,050 $7,500 Up $450
Family $14,100 $15,000 Up $900

Health FSA

Limit on employees’ pre-tax contributions $2,850 $3,050 Up $200
Carryover limit $570 $610 Up $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 separately) No change

Transportation Fringe Benefits (Monthly Limits)

Transit pass and vanpooling
(combined)
$280 $300 Up $20
Parking $280 $300 Up $20

401(k) Contributions

Employee elective deferrals $20,500 $22,500 Up $2,000
Catch-up contributions $6,500 $7,500 Up $1,000
Limit on total contributions $61,000 $66,000 Up $5,000

Adoption Assistance Benefits

Tax exclusion $14,890 $15,950 Up $1,060

*Limits that are not adjusted for inflation

©2022 Zywave, Inc. All rights reserved.

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