2021 Benefit Plan Limits
401(k) Plan Limits
Defined Contribution Plans | 2021 | 2020 | Change |
Maximum employee elective deferral |
$19,500 |
$19,500 |
no change |
Employee catch-up contribution (if age 50 or older by year-end) 1 |
$6,500 |
$6,500 |
no change |
Defined contribution maximum limit, all sources (employee + employer) 2 |
$58,000 |
$57,000 |
+$1,000 |
Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up |
$64,500 |
$63,500 |
+$1,000 |
Employee compensation limit for calculating contributions |
$290,000 |
$285,000 |
+$5,000 |
Key employees' compensation threshold for nondiscrimination testing 3 |
$185,000 |
$185,000 |
no change
|
Highly compensated employees' threshold for nondiscrimination testing 4 |
$130,000 |
$130,000 |
no change |
1 The $6,500 catch-up contribution limit for participants age 50 or older applies from the start of the year for those turning 50 at any time during the year. 2 Total contributions from all sources may not exceed 100% of a participant's compensation. 3 Includes officers of the company sponsoring the plan. 4 For the 2021 plan year, as in 2020, an employee who earns more than $130,000 is an HCE. |
Source: IRS Notice 2020-79.
HSA and HDHP Limits
Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs) | 2021 | 2020 | Change |
HSA contribution limit |
Self-only: $3,600 |
Self-only: $3,550 |
Self-only: +$50 |
HSA catch-up contributions |
$1,000 |
$1,000 |
no change |
HDHP minimum deductibles |
Self-only: $1,400 |
Self-only: 1,400 |
no change |
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) |
Self-only: $7,000 |
Self-only: $6,900 |
Self-only: +100 |
Source: IRS Notice 2020-32.
Health FSA Limits
Health Care Flexible Spending Accounts (Health FSAs) and Limited-Scope (Vision/Dental) FSAs |
2021 |
2020 |
Change |
Maximum salary deferral contribution |
$2,750 |
$2,750 |
no change |
Source: IRS Notice 2019-44.
QSEHRA Limits
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) | 2021 | 2020 | Change |
Maximum payments and reimbursements through the QSEHRA |
Self-only: $5,300 |
Self-only: $5,250 |
Self-only: +$50 |
Source: IRS Notice 2019-44.
Commuter Transit and Parking Limits
Qualified Transportation Benefit Tax Exclusion (monthly limits) |
2021 |
2020 |
Change |
Transit passes and van pool services (employer + employee) |
$270 |
$270 |
no change
|
Qualified parking |
$270 |
$270 |
no change |
Source: IRS Notice 2019-44.
Earnings Subject to Social Security Payroll Tax
Social Security (FICA) Payroll Tax |
2021 |
2020 |
Change |
Maximum earnings subject to Social Security 12.4% FICA payroll tax (6.2% paid by employer and 6.2% paid by employee) |
$142,800 |
$137,700 |
+$5,100 |
Source: Social Security Administration.