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Walk-through

How to Use This Calculator

4 steps

1

Pick your FSA type and tax year

Choose a healthcare FSA (copays, prescriptions, dental, vision) or a dependent-care FSA (daycare, preschool, after-school). Then pick the plan year so the calculator applies the right IRS limit — $3,400 for a 2026 healthcare FSA, $5,000 for dependent care.

2

Enter your election and expected expenses

Put in the amount you plan to elect for the year and a realistic estimate of the eligible expenses you'll actually have. The gap between those two numbers is what drives your use-it-or-lose-it risk.

3

Add your tax rates and pay schedule

Enter your marginal federal rate, state income tax rate, and how many paychecks you get a year. The calculator combines federal + state + 7.65% FICA to estimate your tax savings and shows the per-paycheck deduction.

4

Right-size and read the verdict

Open the Right-Size My Election tab to see a recommended election, your safe maximum if the plan carries over, and a forfeiture-risk meter. The plain-language verdict tells you whether you're over-electing and by how much.

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Reference

Formula & Methodology

4 formulas

Annual tax savings

savings = election × (fed% + state% + 7.65%)

FSA contributions are made by pre-tax salary reduction, so each dollar avoids federal income tax, state income tax, and FICA (Social Security 6.2% + Medicare 1.45% = 7.65%). The savings is the election multiplied by that combined marginal rate.

Per-paycheck deduction

perPaycheck = election ÷ payPeriods

Your annual election is spread evenly across your paychecks (e.g. 26 for biweekly, 24 for semi-monthly). A healthcare FSA makes the full election available on day 1 even though you fund it gradually.

Net cost of the benefit

netCost = election − savings

What the elected benefit actually costs you out of pocket once the tax break is applied. A $3,000 election at a 34.65% combined rate costs about $1,960.

Forfeiture (use-it-or-lose-it)

atRisk = max(0, election − expenses) − protected

Unused funds are your election minus your eligible expenses. A healthcare FSA carryover protects up to the IRS cap ($680 for 2026); a grace period gives ~2½ extra months to spend. Anything left over and unprotected is forfeited.

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YMYL

Trust, Methodology & Sources

Written by Calculover Editorial Team · Updated 2026-06-14 · 3 sources

Editorial accountability

Author: {{^authorProfileUrl}}Calculover Editorial Team{{/authorProfileUrl}} - Personal finance content

Owner: Calculover Editorial Team - Methodology review

Last reviewed: 2026-06-14

Last verified: 2026-06-14

Methodology

Tax savings multiply the election (capped at the IRS limit) by the combined marginal rate the user avoids: federal income tax + state income tax + 7.65% FICA (Social Security 6.2% + Medicare 1.45%). Per-paycheck divides the election by pay periods; net cost subtracts savings from the election. Forfeiture compares the election to expected eligible expenses, sheltering unused funds with a healthcare-FSA carryover (up to the dated IRS cap) or a grace period. Limits and the carryover cap are stored in a dated constant block sourced from IRS Revenue Procedures.

Assumption: The marginal federal and state rates entered apply to the full election, and FICA (7.65%) applies in full — income above the Social Security wage base, where the 6.2% portion stops, is not modeled.

Assumption: The plan year matches the IRS limit selected, and the plan offers the rollover option chosen (carryover, grace period, or neither).

Assumption: Expected eligible expenses are the user's own estimate; the calculator does not verify whether specific expenses qualify.

Limitations & guidance

Estimates federal + state + FICA savings only; it does not model employer contributions, state-specific FSA treatment, or the interaction with the dependent-care tax credit.

Results depend on the rates and expense estimates you enter — actual tax savings and forfeiture will differ. Confirm your plan's carryover, grace period, and eligible-expense rules in your benefits documents.

Professional guidance: This calculator is for educational purposes only and is not financial, tax, or legal advice. Confirm current FSA limits at IRS.gov and consult your benefits administrator or a qualified tax professional before making election decisions.

Primary sources

IRS Rev. Proc. 2025-32 — 2026 health FSA limits and carryover

IRS — Publication 969, Health Flexible Spending Arrangements

IRS — Publication 503, Child and Dependent Care Expenses

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Glossary

Key Terms Explained

6 terms

Flexible Spending Account (FSA) An employer-sponsored account funded with pre-tax salary reduction that you use to pay for eligible healthcare or dependent-care expenses. Lowering your taxable wages is what creates the savings.

Election The total dollar amount you commit to contribute for the plan year, chosen during open enrollment. For 2026 the healthcare FSA election is capped at $3,400; dependent care at $5,000 ($2,500 if married filing separately).

Use-it-or-lose-it The IRS rule that FSA funds not spent by the plan deadline are forfeited, unless the plan offers a carryover or a grace period. It's the main reason to elect carefully.

Carryover A healthcare-FSA feature that lets up to a capped amount of unused funds roll into the next plan year ($680 for 2026). Dependent-care FSAs cannot carry over. A plan can offer a carryover or a grace period, but not both.

Grace period An optional extension of up to 2½ months after the plan year ends during which you can still incur and claim expenses against the prior year's balance.

FICA Federal payroll tax of 7.65% (6.2% Social Security up to the wage base + 1.45% Medicare). FSA salary reductions escape FICA, which is the extra savings an FSA has over a plain tax deduction.

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Scenarios

Real-World Examples

3 worked examples

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Predictable spender

$3,000 healthcare FSA, expenses match

FSA type Healthcare Election $3,000 Expected expenses $3,000 Combined rate 34.65%

At a 22% federal + 5% state + 7.65% FICA combined rate, the $3,000 election saves about $1,040 in taxes, so the benefit really costs $1,960 — roughly $115 per biweekly paycheck. Because expected expenses equal the election, there is no forfeiture risk: this is the ideal setup.

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Over-elector

$3,000 elected, only $2,000 in expenses

Election $3,000 Expected expenses $2,000 Rollover Carryover ($680) At risk $320

The $1,000 of projected unused funds is larger than the $680 carryover cap, so $680 would roll into next year but $320 would be forfeited. The tax savings on the spent portion are still real — but lowering the election toward $2,680 (expenses + carryover) would capture the same benefit with zero forfeiture.

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Working parents

$5,000 dependent-care FSA

FSA type Dependent care Election $5,000 Expected expenses $5,000 Combined rate 34.65%

Daycare easily exceeds $5,000 a year, so a married-joint household can elect the full $5,000 with no forfeiture risk and save about $1,730 in taxes. Note dependent-care FSAs can't carry over — but since expenses match the election, that doesn't matter here. (Married filing separately is limited to $2,500.)

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Deep Dive

How to Decide How Much to Put in Your FSA

4 chapters · 5 min read

A Flexible Spending Account is one of the easiest tax breaks an employee can get — every dollar you route through it dodges federal, state, and payroll tax. The trick is the use-it-or-lose-it rule: elect too much and you forfeit the surplus. This calculator estimates your savings and, more importantly, helps you right-size the election so you capture the tax break without giving money back.

How the FSA Calculator works

FSA contributions come out of your paycheck before taxes are calculated, lowering your taxable wages. So the savings is simply your election multiplied by the combined marginal rate you avoid: federal income tax + state income tax + 7.65% FICA. At a common 22% federal / 5% state bracket, that's a 34.65% combined rate — a $3,000 election saves about $1,040.

The calculator also splits the election into per-paycheck deductions and the true net cost after the tax break, then models forfeiture: any election above your expected eligible expenses is at risk unless your plan offers a carryover or grace period.

FSA vs HSA — which is which

FSAs and HSAs are different accounts. An HSA requires a high-deductible health plan, the money is yours forever (it never expires and is portable between jobs), and you can invest it. An FSA works with any health plan, but it's use-it-or-lose-it and generally stays with your employer. If you're eligible for an HSA, it's usually the stronger long-term vehicle; an FSA shines for predictable, near-term expenses and for dependent care, which has no HSA equivalent.

Eligible expenses and avoiding forfeiture

Healthcare FSA funds cover copays, deductibles, prescriptions, dental and vision care, and many over-the-counter items. Dependent-care funds cover daycare, preschool, before/after-school care, and day camp for children under 13. The safest election is the amount you're confident you'll spend. If your plan offers a carryover, you can safely add up to the carryover cap on top — the Right-Size tab shows that safe maximum. Add up last year's actual spending before you commit, and remember a healthcare FSA gives you the full election on day one, which is handy for a big planned expense like braces or LASIK.

Limits and edge cases

The IRS sets the limits, held in this tool in a dated block: 2026 healthcare FSA $3,400 (carryover up to $680), 2025 $3,300 ($660). Dependent care is $5,000 per household ($2,500 if married filing separately) and is not inflation-indexed. Electing above the cap isn't allowed, so the calculator caps the figures and flags it. This tool estimates federal + state + FICA savings only — it doesn't model income above the Social Security wage base (where the 6.2% portion stops), employer contributions, or state-specific rules. Treat the output as a planning estimate, not tax advice.

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Questions

Frequently Asked Questions

7 questions

How much should I put in my FSA?+

Elect what you're confident you'll spend on eligible expenses during the plan year. Add up predictable costs — copays, prescriptions, dental, vision, or daycare — and use that as your baseline. If your plan offers a carryover, you can safely elect up to the carryover cap above that estimate, because any leftover up to the cap rolls into next year. The Right-Size My Election tab calculates this safe maximum for you.

What is the FSA contribution limit for 2026?+

For 2026 the healthcare FSA salary-reduction limit is $3,400 (up from $3,300 in 2025), with a carryover of up to $680. The dependent-care FSA limit is $5,000 per household, or $2,500 if married filing separately — that figure is set by law and is not adjusted for inflation. You can contribute to both a healthcare and a dependent-care FSA in the same year.

What's the difference between an FSA and an HSA?+

An HSA requires a high-deductible health plan, the funds roll over forever and are portable between employers, and you can invest the balance. An FSA works with any plan but is use-it-or-lose-it and usually tied to your employer. If you qualify for an HSA it's typically better for long-term saving; an FSA is great for predictable near-term expenses and is the only option for tax-free dependent-care spending.

What happens to FSA money I don't spend?+

Under the use-it-or-lose-it rule, unspent funds are forfeited at the end of the plan year — unless your plan offers a carryover (healthcare FSA only, up to $680 for 2026) or a grace period (up to 2½ extra months to incur expenses). A plan can offer one or the other, not both. Dependent-care FSAs can never carry over but may offer a grace period.

How does an FSA actually save me money?+

Contributions are deducted from your pay before income and payroll taxes are calculated, so they lower your taxable wages. Each dollar avoids federal income tax, state income tax, and 7.65% FICA. At a 22% federal / 5% state bracket that's a 34.65% combined rate — meaning a $3,000 election cuts your tax bill by roughly $1,040.

What expenses are FSA-eligible?+

Healthcare FSAs cover copays, deductibles, prescriptions, dental and vision care, and many over-the-counter medicines and supplies. Dependent-care FSAs cover daycare, preschool, before- and after-school care, and day camp for children under 13 (or care for a disabled dependent) that lets you work. Check your plan's specific list — eligibility can vary slightly by employer.

Can I share my results?+

Yes. The calculator encodes your inputs into the page URL, so clicking Share copies a link that reproduces your exact scenario. Send it to a spouse or your benefits advisor and they'll see the same numbers.

Download a one-page PDF of your numbers instantly. Add your email to also get our occasional calculator tips — no spam, unsubscribe anytime. Privacy.

Limit	Healthcare FSA	Dependent-care FSA
2026 election cap	$3,400	$5,000 ($2,500 if married filing separately)
2025 election cap	$3,300	$5,000 ($2,500 if MFS)
2026 carryover	Up to $680 rolls over	Not allowed
2025 carryover	Up to $660 rolls over	Not allowed
Grace period	Up to 2½ months (if plan offers)	Up to 2½ months (if plan offers)
Eligible expenses	Copays, prescriptions, dental, vision, OTC meds	Daycare, preschool, before/after-school, day camp
Funds available	Full election available day 1	Only as contributions accrue

FSA Calculator