United States · Benefits · FSA
Health FSA contribution limit 2027.
The most you can elect through payroll in 2027, the carryover cap and what the election saves in tax.
Short answer: The 2027 limit on voluntary salary reductions to a health flexible spending arrangement is $3,500, up $100 from 2026. If your plan lets unused money carry over, the most it can carry is $700, up from $680.
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Result
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The 2027 health FSA numbers
Section 3.16 of Rev. Proc. 2026-35 gives the section 125(i) dollar limit on voluntary salary reductions for health flexible spending arrangements in plan years that begin in 2027: $3,500. If the cafeteria plan allows carryover of unused amounts, the carryover maximum is $700. IR-2026-133 lists the same two changes.
| Item | 2027 | 2026 | Change |
|---|---|---|---|
| Salary reduction limit | $3,500 | $3,400 | +$100 |
| Carryover maximum | $700 | $680 | +$20 |
How the limit applies
The limit is on your own salary reductions, so employer contributions are separate. It is set per employee for a plan year that starts in 2027, so each spouse with their own employer plan can elect up to the limit. A plan may set a lower maximum, and a plan with a grace period instead of a carryover follows its own rules. This page is about the health FSA only; dependent care FSAs have a separate statutory limit that Rev. Proc. 2026-35 does not set.
What changed from 2026
The limit rose $100 to $3,500 and the carryover rose $20 to $700. An employee who maxes the election saves slightly more tax than the year before at the same rates.
Worked example (2027)
An employee in the 22 percent federal bracket elects the full $3,500. The money is taken before income tax and before the 7.65 percent payroll tax, so the saving is $3,500 x (22% + 7.65%) = $3,500 x 29.65% = $1,037.75. At the 2026 limit of $3,400 the same worker saves $1,008.10 because the election is capped lower. Add state income tax and the saving rises.
Common mix-ups
- The limit is not what your plan allows. An employer can set a lower maximum than the IRS limit, so check your plan documents.
- Carryover is not the same as the election limit. The carryover cap of $700 is how much unused money may roll into the next plan year, if the plan offers it. It does not raise the $3,500 election limit.
- The FSA limit is not the HSA limit. Health savings accounts have their own contribution limits and need a high-deductible plan; see the HSA limits page.
- The 2027 limit is not for a plan year that began in 2026. A plan year that begins in 2026 uses $3,400.
Method
The calculator caps your election at the 2027 limit and multiplies the counted amount by your federal marginal rate, your state rate if you enter one, and 7.65 percent for payroll tax if you tick the box. Pre-tax FSA salary reductions are excluded from income tax and payroll tax wages. It then shows the same election under the 2026 limit. The result is an estimate of tax saved, not a guarantee, and it ignores wages above the Social Security wage base where the 6.2 percent part stops applying.
What this does not cover
- Dependent care FSA limits, which are set by statute and not in Rev. Proc. 2026-35.
- Limited-purpose FSAs, HSAs and the grace period rule.
- Wages above the Social Security wage base, where payroll tax savings are smaller.
- Which expenses your plan reimburses.
Figures read from the sources below on November 9, 2026. Last updated November 9, 2026.
Sources
- IRS Rev. Proc. 2026-35 (tax year 2027 inflation adjustments), section 3.16 (retrieved November 9, 2026)
- IRS news release IR-2026-133, November 5, 2026 (retrieved November 9, 2026)
- IRS Rev. Proc. 2025-32 (tax year 2026 figures used for the comparison column) (retrieved November 9, 2026)
Frequently asked questions
What is the health FSA limit for 2027?
$3,500 in voluntary salary reductions for plan years beginning in 2027, up from $3,400.
What is the FSA carryover limit for 2027?
$700, up from $680, for plans that allow unused amounts to carry over.
Can both spouses contribute the full amount?
Each employee can elect up to the limit through their own employer plan, so spouses with separate plans can each elect up to it.
How much tax does the maximum FSA election save?
At a 22 percent federal rate and 7.65 percent payroll tax, $3,500 saves about $1,037.75. Your rates may differ.
Is the dependent care FSA limit in this table?
No. Rev. Proc. 2026-35 section 3.16 covers health FSAs. Dependent care limits are set separately.
Does my employer have to offer the full limit?
No. The plan can set a lower maximum, and it does not have to offer a carryover.
Where does the 2027 limit come from?
IRS Revenue Procedure 2026-35, section 3.16, and news release IR-2026-133 of November 5, 2026.
Not legal or tax advice
These are the IRS figures for tax year 2027 in an unofficial guide that no tax agency runs. A result here is an estimate from the numbers on this page, not a return. Nothing you type is transmitted anywhere. Confirm with IRS forms and instructions or a tax professional before you file.