IRS Announces 2022 Employee Benefit Plan Limits


The Internal Revenue Service (IRS) recently announced the cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare plans for 2022. Most of the dollar limits currently in effect for 2021 will increase.

The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2021 and 2022.

RETIREMENT PLAN LIMITS (guidance link) 2021 Δ 2022
Annual compensation limit $290,000 $305,000
401(k), 403(b) & 457(b) before-tax contributions $19,500 $20,500
Catch-up contributions (if age 50 or older) $6,500 $6,500
Highly compensated employee threshold $130,000 $135,000
Key employee officer compensation threshold $185,000 $200,000
Defined benefit plan annual benefit and accrual limit $230,000 $245,000
Defined contribution plan annual contribution limit $58,000 $61,000
Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period $230,000 $245,000
ESOP limit for determining the maximum account balance subject to the general five-year distribution period $1,165,000 $1,230,000
HEALTH AND WELFARE PLAN LIMITS (guidance links here and here) 2021 Δ 2022
Health Flexible Spending Accounts
Maximum salary reduction limit $2,750 $2,850
Health FSA Carryover Limit $550 $570
Dependent Care Flexible Spending Accounts±
If employee is married and filing a joint return or if the employee is a single parent $10,500 $5,000
In employee is married but filing separately $5,250 $2,500
Excepted Benefit Health Reimbursement Arrangements $1,800 $1,800 
Qualified Transportation Fringe Benefit and Qualified Parking (monthly limit) $270 $280
High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)
HDHP – Maximum annual out-of-pocket limit (excluding premiums):
Self-only coverage $7,000 $7,050
Family coverage $14,000 $14,100
HDHP – Minimum annual deductible:
Self-only coverage $1,400 $1,400
Family coverage $2,800 $2,800
HSA – Annual contribution limit:
Self-only coverage $3,600 $3,650
Family coverage $7,200 $7,300
Catch-up contributions (age 55 or older)± $1,000 $1,000
SOCIAL SECURITY WAGE BASE (guidance link) 2021 Δ 2022
Social Security Maximum Taxable Earnings $142,800 $147,000


Plan sponsors should update payroll and plan administration systems for the 2022 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.