United States · Federal · Employer benefits
Employee benefit limits 2027.
The 2027 tax-free limits for health FSAs, educational assistance, adoption assistance, transit, parking and QSEHRA, with a per-paycheck ceiling for each.
Short answer: For 2027 the limits are $3,500 for health FSA salary reductions (carryover up to $700), $5,400 of employer educational assistance, $18,250 of employer adoption assistance, $350 a month each for transit and for parking, and $6,700 or $13,550 for a QSEHRA.
Per pay period ceilings
Result
Press Calculate to see the per-paycheck ceilings.
All the limits in one place
Revenue Procedure 2026-35 indexes several employer-benefit limits for taxable years beginning in 2027. Each one caps how much an employee can receive tax free or elect through a cafeteria plan.
| Benefit | Code section | 2026 | 2027 |
|---|---|---|---|
| Health FSA salary reduction | 125(i) | $3,400 | $3,500 |
| Health FSA carryover, maximum | 125 | $680 | $700 |
| Educational assistance exclusion | 127 | $5,250 | $5,400 |
| Adoption assistance exclusion, per child | 137 | $17,670 | $18,250 |
| Transit pass and commuter vehicle, per month | 132(f) | $340 | $350 |
| Qualified parking, per month | 132(f) | $340 | $350 |
| QSEHRA, self-only | 9831(d) | $6,450 | $6,700 |
| QSEHRA, family | 9831(d) | $13,100 | $13,550 |
Educational assistance is indexed for the first time
Section 127 has long allowed employers to provide up to $5,250 of educational assistance tax free. Under section 127(d), the amount is increased for inflation for taxable years beginning after 2026, so 2027 is the first year it moves, to $5,400. The assistance has to be provided under a written plan that meets the section 127(b) requirements.
Why a per-paycheck view helps
An annual limit is easy to cross by accident when a mid-year raise or a change in pay frequency shifts deductions. Dividing the cap by your number of pay periods shows the most a payroll deduction can be each pay date without crossing it. The calculator does this for each benefit. A plan may set lower limits than the law allows, so the plan document controls what you can elect.
What changed from 2026
The health FSA limit rose $100 to $3,500 and the carryover $20 to $700. Educational assistance rose from $5,250 to $5,400, the first change in that figure, because the law began indexing it after 2026. Adoption assistance rose from $17,670 to $18,250, and transit and parking from $340 to $350 a month. QSEHRA limits went up $250 and $450.
Worked example (2027)
An employee paid every two weeks, 26 pay periods, can elect a health FSA of up to $3,500, which is $134.62 a pay period. A monthly-paid employee with 12 periods would divide $3,500 by 12 to get $291.67. A commuter paying $350 a month for transit has a $4,200 annual limit, $161.54 per bi-weekly pay period. Education assistance of $5,400 is $207.69 per bi-weekly period. An employee who receives $6,000 in employer educational assistance in 2027 has $600 over the limit, taxable as wages.
Common mix-ups
- The limits are per employee, per year. They do not reset by pay period; the per-paycheck view is only a pacing tool.
- Transit and parking are separate $350 limits. Using one does not use up the other.
- Dependent care is not on this table. Its 2027 limit is not in this revenue procedure.
- Educational assistance includes student loan payments. The 2025 law made the employer student loan repayment option permanent, within the same cap.
- A plan can be stricter. The law sets a ceiling; the plan document sets what is offered.
Method
The table divides each annual limit by the number of pay periods you choose. Transit and parking are twelve months at $350. It does not know your plan's own limits, whether you already used part of the year, or the HSA and dependent care limits, which come from other sources. Figures were read on November 9, 2026.
What this does not cover
- The 2027 HSA contribution limit, which comes from a separate revenue procedure (see the HSA page).
- The dependent care assistance limit.
- Retirement plan limits for 2027, which the IRS has not published as of the read date.
- State rules on payroll deductions.
Figures read from the sources below on November 9, 2026. Last updated November 9, 2026.
Sources
- IRS Revenue Procedure 2025-32, section 2.09 (employer student loan payments as educational assistance made permanent) (retrieved November 9, 2026)
- IRS Revenue Procedure 2026-35, section 3.16 (cafeteria plans) (retrieved November 9, 2026); IRS Revenue Procedure 2026-35, section 3.17 (educational assistance) (retrieved November 9, 2026); IRS Revenue Procedure 2026-35, section 3.18 (qualified transportation fringe) (retrieved November 9, 2026); IRS Revenue Procedure 2026-35, section 3.20 (adoption assistance) (retrieved November 9, 2026); IRS Revenue Procedure 2026-35, section 3.68 (QSEHRA) (retrieved November 9, 2026)
- IRS Revenue Procedure 2025-32, section 4.15, 4.16, 4.18 and 4.63 (the 2026 amount) (retrieved November 9, 2026)
- 26 U.S.C. section 127 (educational assistance programs), text at Cornell Legal Information Institute (retrieved November 9, 2026)
- IRS news release IR-2026-133, November 5, 2026 (retrieved November 9, 2026)
Frequently asked questions
What is the 2027 health FSA limit?
$3,500 in salary reductions, with a maximum carryover of $700 if the plan allows carryover.
What is the 2027 educational assistance limit?
$5,400, up from $5,250, the first inflation increase under section 127(d).
What is the 2027 transit and parking limit?
$350 a month for transit and commuter vehicle, and $350 a month for qualified parking.
What is the adoption assistance exclusion for 2027?
Up to $18,250 per child, with an income phase-out starting at $273,680.
What are the QSEHRA limits?
$6,700 for self-only coverage and $13,550 for family coverage.
Are these limits pre-tax or after-tax?
They are limits on tax-free benefits and pre-tax elections. Amounts above them are generally taxable wages.
Where is the dependent care FSA limit?
It is not in this table. Check the dependent care page or IRS guidance for the 2027 amount.
Not legal or tax advice
This page is general information from an unofficial guide, not legal, payroll or tax advice. Tax law changes and your facts may differ. Confirm figures with the IRS or a tax professional before you file or set payroll. Nothing you type is sent anywhere.