Article
2026 payroll and benefits compliance made easy with Baker Tilly Advantage
Dec. 15, 2025 · Authored by Deanna Kempinski
As businesses prepare for the new year, payroll and benefits compliance remain a critical priority. Each year, the Internal Revenue Service (IRS) and other regulatory bodies adjust contribution limits that impact social security, retirement plans, Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), Adoption Assistance, High Deductible Health Plans (HDHPs) and commuter benefits. Missing these adjustments can lead to costly errors, compliance risks and frustrated employees.
For human resources (HR) and finance leaders, staying on top of these changes isn’t just about accuracy; it’s about creating a seamless experience for your workforce while protecting your organization from penalties. We’ve highlighted the key limits for 2026 you need to be aware of, and how Baker Tilly Advantage can simplify the process for you.
Social security wage base
- The social security wage limit will increase to $183,600, up $7,500 from 2025
- The maximum social security tax for employees and employers will be $11,383.20
- Medicare rates remain at 1.45% with no wage cap / the additional 0.9% tax applies for high earners (over $200,000 filing single, $250 for joint filing)
Retirement plan contribution limits
- 401(k), 403(b), and 457 plans: Employee contribution limits are projected to increase by $1,000 to $24,500.
- Catch-up contributions for employees over the age of 50 will increase to $8,000
- Under Secure 2.0, employees aged 60-63 may qualify for an additional “super” catch-up of $11,250
- Combined employee and employer contributions could reach $72,000
Health Savings Account (HSA) limits
- Individual coverage limit increases to $4,400
- Family coverage limit increases to $8,750
- Catch-up contributions for those ages 55+ remain at $1,000