Payroll & Benefits Annual Limits Reference 2026

Quick answer

Keep one maintained table of annual payroll and benefits limits—Social Security wage base, retirement deferrals, HSA and FSA caps, mileage rates, and state program figures—and point every audit rule at that table so no check silently tests last year's number.

Every audit check that tests a dollar amount against a legal ceiling depends on a number that changes once a year. The Social Security wage base moves in October, the retirement plan limits in November, the health account limits in the spring, the state leave contribution rates on each state's own schedule. When those numbers are buried inside individual reports, they drift: one check gets updated, another does not, and the audit quietly tests against last year's figure. Keeping them on one page, refreshed on a known cadence, and linking every check to that page is the simplest control against that drift.

The figures below are the published values for tax year 2026, verified against the source named in each row on the date in the maintenance log. They are a reference, not a substitute for the source. Before any figure is used as an audit threshold, confirm it against the current IRS notice or publication, the SSA fact sheet, the DOL wage and hour pages, or the relevant state agency notice. Where a state program's figure could not be confirmed on the agency's own page, the row says so.

Item	2026	2025	Notes	Source
Social Security wage base	$184,500	$176,100	Employee and employer tax stops once year-to-date Social Security wages reach the base	SSA 2026 COLA fact sheet; IRS Publication 15 (2026)
Social Security rate	6.2% employee, 6.2% employer	same	Applies to wages up to the base	IRS Publication 15 (2026)
Medicare rate	1.45% employee, 1.45% employer	same	No wage base	IRS Publication 15 (2026)
Additional Medicare tax	0.9% employee only	same	Withholding starts in the pay period in which year-to-date wages exceed $200,000, regardless of filing status; no employer match	IRS Additional Medicare Tax questions and answers; Topic 560

Federal income tax withholding

Item	Value	Notes	Source
Supplemental wage flat rate	22%	Bonuses, commissions, and other supplemental wages withheld separately from regular wages	IRS Publication 15 (2026)
Supplemental wage rate above $1,000,000	37%	Applies once the employee's supplemental wages in the calendar year exceed $1,000,000	IRS Publication 15 (2026)
Form W-4 exempt status expiry	February 15 of the following year	An exempt W-4 is valid only for the calendar year furnished; without a new one by February 15, withhold as single or married filing separately with no other entries. A late exempt W-4 applies to future wages only, with no refund of tax already withheld	IRS Topic 753; Publication 15

Test Every Limit Against Live Payroll Data

Praisidio checks contribution, wage base, and benefit limits across every employee each pay cycle—no spreadsheet maintenance.

See Limit Monitoring →

Retirement plans

Item	2026	2025	Notes	Source
401(k), 403(b), 457(b) elective deferral, section 402(g)	$24,500	$23,500	Pre-tax plus Roth combined; loan repayments excluded	IRS Notice 2025-67; IR-2025-111
Catch-up, age 50 and over, section 414(v)	$8,000	$7,500	Added to the deferral limit	IRS Notice 2025-67
Higher catch-up, ages 60 to 63	$11,250	$11,250	Replaces the standard catch-up for that age band where the plan allows it	IRS Notice 2025-67
Annual additions limit, section 415(c)	$72,000	$70,000	Employee plus employer contributions, excluding catch-up	IRS COLA limits table
Compensation limit, section 401(a)(17)	$360,000	$350,000	Maximum compensation considered for plan contributions	IRS COLA limits table
Highly compensated employee threshold, section 414(q)	$160,000	$160,000	Prior-year compensation test for nondiscrimination	IRS COLA limits table
Key employee threshold, section 416	$235,000	$230,000	Top-heavy testing	IRS COLA limits table
SIMPLE plan deferral	$17,000	$16,500	Catch-up $4,000 at 50 and over; $5,250 at ages 60 to 63	IRS Notice 2025-67
IRA contribution	$7,500	$7,000		IRS Notice 2025-67
IRA catch-up, age 50 and over	$1,100	$1,000	Now indexed	IRS Notice 2025-67

Health accounts

Item	2026	Notes	Source
HSA contribution, self-only coverage	$4,400	Employee plus employer contributions combined	IRS Rev. Proc. 2025-19
HSA contribution, family coverage	$8,750		IRS Rev. Proc. 2025-19
HSA catch-up, age 55 and over	$1,000	Set by statute, not indexed	Internal Revenue Code section 223(b)(3)
HDHP minimum deductible	$1,700 self-only, $3,400 family	Plan must meet this to be HSA-eligible	IRS Rev. Proc. 2025-19
HDHP out-of-pocket maximum	$8,500 self-only, $17,000 family		IRS Rev. Proc. 2025-19
Health FSA salary reduction	$3,400	Per employee per plan year; up $100 from 2025	IRS Rev. Proc. 2025-32
Health FSA carryover	$680	Where the plan allows carryover; up $20 from 2025	IRS Rev. Proc. 2025-32
Dependent care assistance	$7,500 married filing jointly or single; $3,750 married filing separately	Raised from $5,000 for tax years beginning after 2025 by Public Law 119-21, section 70404	IRS Publication 15-B (2026)
Qualified transportation and parking	$340 per month	Each benefit separately; up $15 from 2025	IRS Rev. Proc. 2025-32

Wage and hour

Item	Value	Notes	Source
Federal minimum wage	$7.25 per hour	Unchanged since 2009; state and local floors are usually higher	DOL Wage and Hour Division
Federal tipped minimum cash wage	$2.13 per hour	Tip credit must bring the employee to $7.25; many states restrict or prohibit the credit	DOL Fact Sheet 15
FLSA exempt salary level	$684 per week, $35,568 per year	The 2024 rule raising this level was vacated by the Eastern District of Texas on November 15, 2024; DOL applies the 2019 level	DOL Fact Sheet 17A; DOL overtime rulemaking page
Highly compensated employee exemption	$107,432 per year	Total annual compensation test under the 2019 rule	DOL Fact Sheet 17A

State salary thresholds for exempt status are often well above the federal level and in some states are set as a multiple of the state minimum wage. Do not use the federal figure alone for employees in those states; see the minimum wage and exempt threshold guide.

Information returns

Item	Value	Notes	Source
Form 1099-NEC and 1099-MISC reporting threshold	$2,000	For payments made after December 31, 2025; previously $600. Indexed for inflation after 2026	Public Law 119-21; IRS Instructions for Forms 1099-MISC and 1099-NEC
Electronic filing requirement	10 or more returns in aggregate	Counted across all information return types	IRS Publication 1099
Form W-2 to employees and W-3 to SSA	January 31		IRS General Instructions for Forms W-2 and W-3
Form 1099-NEC to recipients and IRS	January 31		IRS Instructions for Forms 1099-MISC and 1099-NEC

Garnishments

Order type	Maximum withholding	Notes	Source
Ordinary creditor garnishment	Lesser of 25% of disposable earnings, or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage ($217.50 per week; $471.25 semimonthly; $942.50 monthly)	Disposable earnings are gross wages minus legally required deductions such as federal, state, and local taxes, Social Security, Medicare, and state unemployment or disability contributions; voluntary deductions do not reduce them	CCPA Title III; DOL Fact Sheet 30
Child or spousal support, employee supports another spouse or child	50% of disposable earnings		DOL Fact Sheet 30
Child or spousal support, no other dependents	60% of disposable earnings		DOL Fact Sheet 30
Support arrears more than 12 weeks	Add 5% to the applicable support limit	55% or 65%	DOL Fact Sheet 30
Federal student loan administrative wage garnishment	15% of disposable earnings	Subject to the 30 times minimum wage floor	20 U.S.C. 1095a; 34 CFR 34

State law may set lower caps and different administrative fee allowances; the state figure governs where it is more protective of the employee.

State paid family and medical leave employee contributions

Employee-paid state programs that must appear as a statutory deduction line for employees working in the state. Rates are for 2026 as published on each agency's site or press release on the verification date; wage caps follow the Social Security wage base unless stated.

State	Program	Employee share for 2026	Wage cap	Notes	Source
California	SDI and PFL	1.3%	None; all wages subject since January 1, 2024	Single SDI deduction funds both	California EDD rates and withholding page
New Jersey	TDI and FLI	TDI 0.19%; FLI 0.23%	$171,100	Maximum worker contribution $325.09 TDI, $393.53 FLI; FLI is worker-funded only	NJ Department of Labor 2026 benefit rates release
New York	DBL and PFL	DBL 0.5% of wages up to $0.60 per week; PFL 0.432%	PFL annual cap $411.91	PFL cap based on the statewide average weekly wage of $1,833.63	NY Paid Family Leave 2026 page; NY Workers' Compensation Board DBL page
Rhode Island	TDI and TCI	1.1%	$100,000	Down from 1.3% in 2025	RI DLT 2026 tax rates release
Hawaii	TDI	Up to one half of the premium, not more than 0.5% of weekly wages	$7.50 per week maximum	Employer may but need not withhold	Hawaii DLIR 2026 maximum weekly wage base notice
Massachusetts	PFML	Up to 0.46% total: medical 0.28% (100% of the medical contribution), family 0.18% (40% of the family contribution)	Social Security wage base	Employers with 25 or more covered individuals pay the remaining 60% of family leave; contribution split changes January 1, 2027 under Chapter 101 of the Acts of 2026	Mass.gov PFML contribution rates page
Washington	PFML	71.43% of the 1.13% premium, about 0.81%	$184,500	Employers with 50 or more employees pay the 28.57% employer share	WA Employment Security Department 2026 premium release
Connecticut	PFML	0.5%	Social Security wage base	Rate held at 0.5% for 2026	CT Paid Leave contributions page
Oregon	PFML	60% of the 1% contribution, 0.6%	$184,500	Employers with 25 or more employees pay the 40% employer share	Paid Leave Oregon contributions page
Colorado	FAMLI	0.44% of the 0.88% premium	$184,500	Employer pays the other 0.44%	Colorado FAMLI premiums page
Delaware	Paid Leave	Up to 0.4%, half of the 0.8% contribution	See program page	Contributions began January 1, 2025; benefits began January 1, 2026; rate guaranteed through 2026	Delaware Department of Labor Paid Leave page
Minnesota	Paid Leave	Up to 0.44% of the 0.88% premium	Social Security wage base (program page lists $185,000 for 2026; confirm)	Rate unchanged for 2027; small employer rate 0.66% with the same employee maximum	Minnesota Paid Leave premium rate page
Maine	PFML	0.5%, half of the 1% premium	See program page	Contributions began January 1, 2025; benefits began May 1, 2026; employers with 15 or fewer employees owe 0.5% total, which may be withheld from employees	Maine Department of Labor PFML page
Maryland	FAMLI	0.45% of the 0.9% contribution, starting January 1, 2027	Social Security wage base	No employee deduction during 2026; first contributions due April 30, 2027	Maryland FAMLI contributions page
District of Columbia	Paid Family Leave	None; employer-paid 0.75%	No cap	Listed for completeness; the tax may not be deducted from employees	DC Office of Paid Family Leave employer page

How these figures are used in the audit

Each limit above is consumed by a specific check in the payroll preview audit. The check reads the threshold from this page rather than carrying its own copy.

Limit	Audit check that uses it
Social Security wage base	Social Security tax stopped, or still withheld after year-to-date wages cross the base
Additional Medicare threshold	Medicare line has not stepped up once year-to-date wages pass $200,000
Supplemental wage rates	Federal withholding on bonus and commission codes paid on a separate check
W-4 exempt expiry	Federal income tax stopped, with the February 15 calendar rule
Elective deferral and catch-up limits	Retirement deduction change over $50, and year-to-date deferral projection by age
Section 415(c) and 401(a)(17) limits	Employer match and total contribution ceiling, where the plan is audited from payroll
HSA limits and HDHP requirements	HSA year-to-date projection by enrolled tier, and HSA deduction without a qualifying medical plan
Health and dependent care FSA limits	FSA year-to-date projection
Federal minimum wage and tipped wage	Effective hourly rate floor, and deductions that reduce pay below the floor
FLSA exempt salary level	Exempt employees whose period salary annualizes below the threshold
1099-NEC threshold	Contractor payment reporting, outside the preview audit but fed by the same payroll tables
CCPA garnishment caps	Garnishment and support order lines tested against disposable earnings
State leave contribution rates	Statutory deduction present and at the published rate for employees in contributing states

How Praisidio uses these limits

In Praisidio the limits on this page are not typed into individual queries. They are recorded as thresholds in the data dictionary of each audit collection, so a reviewer opening the collection sees the figure, the notice it came from, and the date it was entered, next to the checks that use it. The preview payroll audit's wage base, additional Medicare, retirement deferral, HSA, FSA, and garnishment checks all read from that record, and the multi-state and minimum wage checks read the state program table in section 8 the same way.

The refresh happens on the same cadence as the notices. The Social Security fact sheet arrives in October, the IRS retirement and inflation notices in November, the state program releases through December, and the HSA revenue procedure the following spring. Each time, the page is updated, the notice number and date are written into the maintenance log, and the audit collection is re-run against a recent preview so the new threshold is exercised before the first payroll of the year depends on it.

That is the difference between a limit that lives in a spreadsheet and one that lives with the audit. As one general manager at a mid-market company put it in a G2 review, "Detailed reports on PTO, payroll, sick time, and evaluations now take less than a minute." The speed comes from the checks being ready to run, and the checks are only ready if their thresholds are current. Praisidio holds a 4.9 out of 5 rating on G2.

Maintenance

Update this page once a year, in November and December, when the IRS cost-of-living notice, the SSA wage base announcement, and the state program rate notices are published. Spring HSA and HDHP figures are published earlier and can be entered when they appear. For each table, record the notice number and its publication date in the log below. Audit checks that consume a figure should be re-run against a recent preview after the update to confirm the new threshold behaves as expected.

Table	Source notice	Notice date	Verified	Date
1. Social Security and Medicare	SSA 2026 COLA fact sheet; IRS Publication 15 (2026)	October 24, 2025	Yes	September 15, 2026
2. Federal income tax withholding	IRS Publication 15 (2026); Topic 753		Yes	September 15, 2026
3. Retirement plans	IRS Notice 2025-67; IR-2025-111	November 13, 2025	Yes	September 15, 2026
4. Health accounts	IRS Rev. Proc. 2025-19; Rev. Proc. 2025-32; Publication 15-B (2026)	May 2025; October 2025	Yes	September 15, 2026
5. Wage and hour	DOL Fact Sheet 17A; DOL overtime rulemaking page		Yes	September 15, 2026
6. Information returns	Public Law 119-21; IRS 1099-MISC and 1099-NEC instructions (2026)		Yes	September 15, 2026
7. Garnishments	DOL Fact Sheet 30		Yes	September 15, 2026
8. State leave programs	Agency pages listed per row	Various	Yes, except the Minnesota cap figure	September 15, 2026

What customers say

Rated 4.9/5 on G2

“Detailed reports on PTO, payroll, sick time, and evaluations now take less than a minute.”Gabriel M., General Manager, mid-market (G2 review)

“Praisidio has made handling a large amount of data much easier, reducing the time taken to less than a minute with automated or one-click reports.”G2 reviewer

“Payroll audit used to be a multi-day exercise every pay period. Praisidio flags deduction mismatches, garnishment errors, and rate changes automatically.”Senior Payroll Manager, logistics — 4,500 drivers and warehouse staff (customer testimonial)

“Our compliance team now flags meal-break violations within 24 hours instead of month-end.”Chief Compliance Officer, retail — 8,000 hourly workers (customer testimonial)

Frequently asked questions

How often do payroll limits change?

Most change annually: Social Security wage base in October, retirement plan limits in November, health account limits in the spring, and state program rates on each state's own schedule.

Where should limits be stored?

In one maintained reference with a verification date and source per figure, so every audit check reads the same value instead of keeping its own copy.

Can Praisidio apply these limits automatically?

Yes. Limits are configured as rules and tested against every employee's year-to-date payroll figures each cycle.

See Annual Limit Checks on Your Data

We’ll show how Praisidio applies current statutory limits to your payroll and surfaces every breach before processing.

Book a demo

Sources and references

Threshold note: Statutory limits, state rates, and agency deadlines change. Confirm current values against IRS, SSA, Department of Labor, and applicable state or federal agency guidance before using them as audit rules.

Payroll and Benefits Annual Limits Reference

Social Security and Medicare