Employee & Employer Withholdings & Limitations for 2026

Social Security

Rate for both the employee and employer stays the same at 6.2%. The wage base increases from $176,100 to $184,500.

Medicare

Rate for both the employee and employers stays the same at 1.45%; also, the withholding tax rate for high-earning employees is still an additional 0.9% for wages paid to an employee over $200,000. This makes the effective Medicare tax rate for high-earning employees 2.35% for wages over $200,000. This does NOT affect the employer rate.

401(k), 403(b) & 457 Plans

Limitation for elective deferrals (contribution) for employees who participate increases from $23,500 to $24,500, and the catch-up for participants aged 50 and over is $8,000. The catch-up for participants attaining age 60 to 63 in 2026 is $11,250; note that the maximum catch-up contribution for a person turning 64 in 2026 is $8,000. Remember that high earners with wages exceeding $150,000 in the prior year must make catch-up contributions on a Roth (after-tax) basis.

Simple Plan

The general limitation for elective deferrals increases from $16,500 to $17,000, and catch-up for participants aged 50 and over is $4,000. The catch-up for participants attaining age 60 to 63 in 2026 is $5,250; note that the maximum catch-up contribution for a person turning 64 in 2026 is $4,000. Also note that the general limitations of $17,000 elective deferrals and $4,000 catch-up contributions can be increased for participants of certain applicable plans to $18,100 and $3,850, respectively, and you should contract your plan administrator to see if the higher amounts are applicable in your situation.

PA state Employer unemployment wage base Per Employee

Remains at $10,000 in 2026.

PA state unemployment employee

Remains at 0.0007 in 2026.

Other Updates for 2026

Mileage Rates

HSA contribution limits

Individual increases to $4,400. Family increases to $8,750. Additional catch-up of $1,000 allowed for those 55 and over.

HDHP minimum required deductibles

Limits will increase to $1,700 for individual and $3,400 for family coverage.

Out-of-pocket maximum limits for HDHP

Limits will increase to $8,500 for individuals and $17,000 for family coverage.

Filing Dates

Reminder

The e-filing requirement for information returns this filing season remains at 10.  This means a business that files 10 or more forms 1099s, W-2s and other information returns this year (in total) must file them electronically to be compliant with the requirements.

W-2 Filing

Recipient copy due to employee, paper copy A due to Social Security Administration, electronic copy A due to Social Security Administration – ALL DUE February 2, 2026.

1099-MISC/1099-NEC Filing

Recipient copy due to subcontractor, paper filing due to IRS, electronic filing due to IRS – ALL DUE February 2, 2026.

Questions about 2026 payroll updates?

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Meet Mike

Questions about 2026 payroll updates?

Mike Stoltzfus, CPA, MST

Partner