2027 HSA and FSA contribution limits for employers

Last verified: 2026-11-09

Key takeaways

• The 2027 HSA limit is $4,500 self-only and $9,000 family, final under Rev. Proc. 2026-24 sec. 3.01(1), with a $1,000 catch-up set by statute.
• The 2027 health FSA salary-reduction limit is $3,500, with up to $700 carried into the next plan year, per Rev. Proc. 2026-35.
• A health FSA plan year that begins in 2026 keeps $3,400 for its entire plan year, including the 2027 months.
• Up to $680 of unused 2026-plan-year amounts may carry into the 2027 plan year if the plan provides carryover.
• Two different $3,500 figures apply in 2027: the HDHP family minimum deductible and the health FSA limit. One is a floor on the plan and the other a ceiling on the election, so keep them in separate fields.
• Employer HSA contributions count toward the same cap, so an employee's payroll room is the limit minus employer funding.

Here is every limit an employer configures for 2027. "Final" means the IRS has published the amount. "Statutory" means the amount is set by law and not indexed.

The limits come from four instruments, and each needs its own field in your configuration.

The sections below take the pieces in order: when each limit lands and which year it governs, who qualifies for the HSA, what the health FSA limit and carryover are, what counts against each cap, and which system changes follow.

When does each 2027 limit apply, and which year does it govern?

The four limits come from four instruments and run on three clocks. The table compares each with 2026.

The clock matters more than the date. Rev. Proc. 2026-24 sets the HSA limit "for calendar year 2027," while the FSA procedures set the limit for plan years beginning in a given year. Picture two clients. One has a plan year starting July 1, 2026, and it runs on $3,400 until June 30, 2027, so its 2027 months never see the 2027 limit. The other starts January 1, 2027, and it is the first to run on $3,500.

Who can contribute up to the 2027 HSA limit, and which $3,500 is which?

An employee can contribute up to the 2027 limit only while covered by a high-deductible health plan (HDHP) that meets the thresholds in Rev. Proc. 2026-24 sec. 3.01(3), which apply for calendar year 2027:

• A minimum deductible of $1,750 self-only or $3,500 family.
• An out-of-pocket maximum of $8,700 self-only or $17,400 family.

Two figures in the 2027 guidance now equal $3,500, and they are different things. The HDHP family minimum deductible is a floor on the health plan. The health FSA limit is a ceiling on what an employee can elect. Before November 5, a mis-keyed field showed an obviously wrong number. Now it shows a plausible one that passes a spot check, so store them as separate fields with separate sources.

A second disqualifier sits outside the HDHP. Per Pub 969 (2025 edition), a general-purpose health FSA, including coverage through a spouse's FSA, generally makes an employee HSA-ineligible. Limited-purpose and post-deductible FSAs do not. An eligibility check therefore cannot stop at the plan list. It has to ask what else covers the employee.

What are the 2027 health FSA limit and carryover?

For plan years beginning in 2027, the salary-reduction limit for a health flexible spending arrangement (the IRS term for a health FSA) is $3,500, and the maximum carryover is $700. Both come from Rev. Proc. 2026-35 sec. 3.16, announced in IR-2026-133 on November 5, 2026.

Plan years beginning in 2026 keep their own numbers, from Rev. Proc. 2025-32 sec. 4.15:

• The salary-reduction limit is $3,400 for plan years beginning in 2026, for the whole plan year.
• Up to $680 of unused amounts from a plan year beginning in 2026 may carry into the following plan year, if the plan provides carryover.

The limit is a ceiling on the employee's salary-reduction election per plan year, under IRC 125(i), and a plan may set a lower one. Store both values per plan, the IRS ceiling and the plan's own cap, and enforce the lower. Load $3,500 for plan years beginning in 2027.

What counts against each cap when the employer contributes?

For the HSA and dependent care, the limit caps a total, so employer money reduces what the employee can elect. The health FSA limit works differently: it caps the employee's own salary-reduction election. What counts, and what happens at the edge, differs by account:

Take an employee with self-only HDHP coverage whose employer deposits $1,200 into the HSA in January. The 2027 limit of $4,500 leaves $3,300 for the employee's payroll elections, per Pub 969's rule that employer contributions count toward the same annual limit. A payroll system that ignores the deposit lets the employee elect the full $4,500 and overshoot by $1,200. That excess draws a 6% excise tax under IRC 4973 for each year it stays uncorrected. An employee 55 or older has $1,000 more room.

Dependent care works the same way with a different pool. Per Pub 15-B (2026), employer-provided assistance and employee pre-tax contributions share one $7,500 limit, applied per return and cut to $3,750 for married filing separately. It is a fixed statutory amount, so $7,500 holds for 2027 unless Congress changes it.

The health FSA is the account where employer money is easy to misread. Under Notice 2012-40, a non-elective employer flex credit does not count against the IRC 125(i) limit, while a credit the employee can take as cash or a taxable benefit does. So a non-elective credit leaves the employee's full $3,500 election room, and a cash-convertible credit reduces it. Check how the plan document defines each credit before you code either case.

What has to change in payroll and enrollment systems for 2027?

Five changes, in the order they depend on each other:

1. Load $4,500 self-only and $9,000 family HSA caps from January 1, 2027, plus the $1,000 catch-up for employees 55 or older by year-end.
2. Subtract each employee's employer HSA contribution from their payroll ceiling.
3. Key the health FSA limit to the plan-year start date: $3,400 for plan years beginning in 2026, $3,500 for 2027.
4. Allow up to $680 from plans beginning in 2026 into the 2027 plan year, and up to $700 from plans beginning in 2027 into 2028, where the plan provides carryover.
5. Cap dependent care employer and employee amounts together at $7,500 per return, $3,750 married filing separately.

Most of that list is configuration you can finish from the instruments above. Step two is different. It needs each employee's company contribution, which lives in the benefits system, and the resulting deduction has to reach whichever payroll the client runs. That is integration work, and it stays open even when every table is right.

Bindbee reads benefits as four models, and the enrollment model carries each enrollment with its employee and company contribution, the number step two subtracts. Bindbee can write a benefits deduction, including an HSA contribution, to payroll through the employee payroll run endpoint, where the integration supports it. Bindbee's production connector syncs every 24 hours by default, adjustable per connection on request.

Support varies by integration. Bindbee's Model Availability Matrix shows, per integration, whether each model is Available, Beta or not available, so you can check a client's payroll before promising the write. The payroll deduction write-back use case covers how that path works, and Bindbee's guide to payroll and benefits integration best practices covers how elections and deductions connect. The arithmetic against the cap stays in your product.

The 2027 limits come from four instruments on three clocks, plus employer money that makes every employee's room different. If you build the benefits or payroll platform your clients' employers use, book a demo to talk through reading enrollment contributions and writing HSA deductions. We build the integrations. You build the product.

FAQ

What is the 2027 health FSA limit?

$3,500 for plan years beginning in 2027, with up to $700 of unused amounts carried into the next plan year if the plan provides carryover. The source is Rev. Proc. 2026-35 sec. 3.16, announced November 5, 2026. A plan year that begins in 2026 stays at $3,400 for its whole plan year.

Do employer HSA contributions count toward the limit?

Yes. Employer contributions and the employee's pre-tax salary reductions share one annual limit. With a $1,200 employer deposit and the $4,500 self-only limit, the employee has $3,300 of payroll room. Excess contributions draw a 6% excise tax for each year they remain uncorrected.

Is the $3,500 HDHP deductible the same as the FSA limit?

No. Both equal $3,500 in 2027, but the HDHP family minimum deductible (Rev. Proc. 2026-24 sec. 3.01(3)) is a floor on the health plan, and the health FSA limit (Rev. Proc. 2026-35 sec. 3.16) is a ceiling on the employee's election. Keep them in separate fields.

Related reading

• Dependent care FSA limit: how the $7,500 cap works in payroll
• Employer HSA contributions: limits, rules and reporting
• HSA catch-up contributions: employer payroll rules