Annual FSA Contribution Limits

The health FSA salary reduction limit (e.g., $3,400 for 2026) applies on a plan year basis. For example, a health FSA with an April – March plan year could allow employees to elect to contribute up to $3,400 for the April 2026 – March 2027 plan year. The limit applies to employee contributions, so employers could contribute in addition to the 2026 $3,400 contribution limit (subject to excepted benefit rules, which limit employer contributions to the greater of $500 or a match of the employee’s contributions).

The limit applies per employee, not on a household basis, so if both spouses are employed and eligible for health FSA coverage, each spouse could contribute up to $3,400 for 2026. In addition, the limit applies on a per-employer basis, so an employee who works for two unrelated employers (i.e., not part of a controlled group or affiliated service group), whether simultaneously or at different times during the same plan year, may elect up to $3,400 in 2026 under each employer’s health FSA.

For a short plan year, the employer is required to pro-rate the annual contribution limit (e.g., ½ of the annual limit for a 6-month short plan year). However, an employee who joins a health FSA mid-plan year may elect to make up to the full annual contribution limit ($3,400 for 2026). This is true even if the individual contributed to a health FSA under another unrelated employer’s plan during the same year.