2025 Cost-of-Living Adjustments
By Louis F. LiBrandi, Partner
Plan sponsors should review the cost-of-living adjustments (COLAs) to determine what, if any, changes need to be communicated to employees by means of orientation meetings and enrollment forms. In addition, the amounts may need to be updated and/or input into the payroll or other human resources information systems used by the employer to monitor contributions made to an employee benefit plan.
The table below contains the dollar limitation for retirement plans and other benefit plan limits and thresholds for 2025 and the dollar limitation for 2022 through 2024 tax years. Many of the amounts for 2025 have been increased.
Cost of Living Adjustments | ||||
Retirement Plans | 2025 | 2024 | 2023 | 2022 |
402(g) Elective Deferrals. | $23,500 | $23,000 | $22,500 | $20,500 |
Catch-up Contributions. | $7,500
| $7,500 | $7,500 | $6,500 |
Catch-up Contributions. | $11,250 | – | – | – |
401(a)(17) Compensation Limit. Ceiling for using compensation to determine benefits in a qualified retirement plan. | $350,000 | $345,000 | $330,000 | $305,000 |
415(c)(1)(A) Maximum dollar amount for a defined contribution plan (excludes catch-up). | $70,000 | $69,000 | $66,000 | $61,000 |
Highly Compensated Employee (HCE). | $160,000 | $155,000 | $150,000 | $135,000 |
Key Employee. Minimum compensation for an officer to be treated as a ‘’key employee.” | $230,000 | $220,000 | $215,000 | $200,000 |
Social Security Wage Base | 2025 | 2024 | 2023 | 2022 |
Social Security Taxable Wage Base. | $176,100 | $168,600 | $160,200 | $147,000 |
Welfare Plans | 2025 | 2024 | 2023 | 2022 |
Health FSA Contribution Limit. | $3,300 | $3,200 | $3,050 | $2,750 |
HSA Contribution Limit – Single. | $4,300 | $4,150 | $3,850 | $3,650 |
HSA Contribution Limit – Family. | $8,550 | $8,300 | $7,750 | $7,300 |
Catch-up Contributions. | $1,000 | $1,000 | $1,000 | $1,000 |
Contact Us
The Employee Benefit Services Group at PKF O’Connor Davies is available to assist employers with all aspects of employee benefit plan compliance. For more information, please contact your client service team or either of the following:
Timothy J. Desmond, CPA
Partner-in-Charge
Employee Benefit Services
tdesmond@pkfod.com | 551.249.1728
Louis F. LiBrandi, EA, CEBS, ChFC, TGPC
Partner
Employee Benefit Services Group
llibrandi@pkfod.com | 646.449.6327