2021 Benefit Plan Limits & Thresholds Chart

Stephen Miller, CEBS By Stephen Miller, CEBS October 28, 2020
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2021 Benefit Plan Limits & Thresholds Chart

401(k) Plan Limits

Defined Contribution Plans 2021 2020 Change

Maximum employee elective deferral

$19,500

$19,500

no change

Employee catch-up contribution (if age 50 or older by year-end) 1

$6,500

$6,500

no change

Maximum employee elective deferral plus catch-up contribution (if age 50 or older by year end)

$26,000

$26,000

no change

Defined contribution maximum limit, all sources (employee + employer) 2

$58,000

$57,000

+$1,000

Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up

$64,500

$63,500

+$1,000

Employee compensation limit for calculating contributions

$290,000

$285,000

+$5,000

Key employees' compensation threshold for nondiscrimination testing 3

$185,000

$185,000

no change

Highly compensated employees’ threshold for nondiscrimination testing 4

$130,000

$130,000

no change

1 The $6,500 catch-up contribution limit for participants age 50 or older applies from the start of the year for those turning 50 at any time during the year.

2 Total contributions from all sources may not exceed 100% of a participant's compensation.

3 Includes officers of the company sponsoring the plan.

4 For the 2021 plan year, as in 2020, an employee who earns more than $130,000 is an HCE.

​Source: IRS Notice 2020-79.


HSA and HDHP Limits

Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs)  2021 2020 Change

HSA contribution limit
(employer + employee)

Self-only: $3,600

Family: $7,200

Self-only: $3,550

Family: $7,100

Self-only: +$50

Family: +$100

HSA catch-up contributions
(age 55 or older)

$1,000

$1,000

no change

HDHP minimum deductibles

Self-only: $1,400

Family: $2,800

Self-only: 1,400

Family: $2,800

no change

no change

HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)

Self-only: $7,000

Family: $14,000

Self-only: $6,900

Family: $13,800

Self-only: +100

Family: +$200

Source: IRS Notice 2020-32.


Health FSA Limits

Health Care Flexible Spending Accounts (Health FSAs) and Limited-Scope (Vision/Dental) FSAs

2021

2020

Change

Maximum salary deferral

$2,750

$2,750

no change

Maximum rollover amount

$550

Raised to $550 from $500 midyear 1

no change from adjusted amount

1 IRS Notice 2020-33, issued May 12, 2020.
Source: IRS Revenue Procedure 2020-45.
Update: The Consolidated Appropriations Act signed into law at the end of 2020 allows employers that sponsor health FSAs or dependent care FSAs the option of permitting participants to roll over all unused amounts in these accounts from 2020 to 2021 and from 2021 to 2022.


QSEHRA Limits

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)  2021 2020 Change

Maximum payments and reimbursements through the QSEHRA

Self-only: $5,300

Family: $10,700

Self-only: $5,250

Family: $10,600

Self-only: +$50

Family: +$100

Source: IRS Revenue Procedure 2020-45.


Commuter Transit and Parking Limits

Qualified Transportation Benefit Tax Exclusion (monthly limits)

2021

2020

Change

Transit passes and van pool services (employer + employee)

$270

$270

no change


Qualified parking

$270

$270

no change

Source: IRS Revenue Procedure 2020-45.


Earnings Subject to Social Security Payroll Tax

Social Security (FICA) Payroll Tax

2021

2020

Change

Maximum earnings subject to Social Security 12.4% FICA payroll tax (6.2% paid by employer and 6.2% paid by employee)

$142,800

$137,700

+$5,100

Source: Social Security Administration.


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