How to Calculate Your Maximum HSA Contribution
Learn how to correctly calculate your personal HSA contribution limit. Understand how your health coverage and eligibility period affect your maximum tax-advantaged savings.
A Health Savings Account (HSA) offers a triple-tax-advantaged way to pay for medical expenses. Contributions are tax-deductible, the funds grow tax-free, and withdrawals for qualified medical costs are also tax-free. Understanding how much you are permitted to contribute each year is necessary to maximize its benefits and avoid potential tax issues.
HSA Eligibility and Coverage Type
Before you can contribute, you must be enrolled in a qualified High-Deductible Health Plan (HDHP). For 2025, an HDHP is a plan with a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. These plans also have a cap on total annual out-of-pocket expenses, which for 2025 cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.
Certain factors can disqualify you from contributing to an HSA, even with an HDHP. You are ineligible if you are enrolled in any part of Medicare or have other health coverage that is not an HDHP, such as a spouse’s traditional health plan. You also cannot contribute to an HSA if you can be claimed as a dependent on someone else’s tax return.
After confirming eligibility, you must identify your HDHP coverage type as either “self-only” or “family.” This distinction is based on who is covered by the plan, not your marital status. A plan that covers only you is considered self-only coverage, while a family plan covers you and at least one other person, such as a spouse or dependent.
Annual Contribution Limits
The Internal Revenue Service (IRS) sets the maximum amounts that can be contributed to an HSA each year. For 2025, the maximum contribution for an individual with self-only HDHP coverage is $4,300. For those with family HDHP coverage, the limit is $8,550. These limits are absolute totals and include all contributions made to your account, whether from you, your employer, or another party.
Individuals age 55 or older by the end of the tax year are eligible to make an extra “catch-up” contribution of $1,000. This amount is added on top of the applicable self-only or family limit. For example, an eligible 60-year-old with self-only coverage could contribute a total of $5,300 in 2025 ($4,300 base + $1,000 catch-up).
If both you and your spouse are 55 or older and each have your own HSAs, you can both make a $1,000 catch-up contribution. These contributions must be made to your respective individual HSA accounts, as joint HSAs are not permitted.
Calculating Your Maximum Contribution
The calculation method depends on whether you were HSA-eligible for the entire calendar year.
Full-Year Calculation
For individuals covered by a qualifying HDHP for all 12 months, the calculation is straightforward. Your personal maximum is the annual limit for your coverage type, plus any catch-up contribution, minus any contributions made by your employer. You can find the amount of your employer’s contribution on your pay stubs or year-end W-2 form.
Partial-Year Calculation (Proration)
If you were not HSA-eligible for the entire year, your contribution limit is prorated based on the number of months you were eligible. Eligibility is determined as of the first day of each month. To calculate this, divide the annual limit by 12 and multiply it by the number of eligible months. For example, if you became eligible for self-only coverage on September 1, you are eligible for four months, and your prorated limit for 2025 would be ($4,300 / 12) 4, which is approximately $1,433.
The Last-Month Rule
The “last-month rule” is an exception to proration. If you are HSA-eligible on the first day of the last month of the tax year (December 1), you are considered eligible for the entire year. This allows you to contribute the full annual maximum, including any catch-up contribution, regardless of how many months you were actually covered.
This rule has a condition called the “testing period.” You must remain HSA-eligible for the entire following calendar year, from January 1 through December 31, to keep the full contribution. If you fail to meet this requirement for reasons other than death or disability, the extra contribution amount becomes taxable income and is subject to an additional 10% penalty.
Correcting Excess Contributions
Contributing more to your HSA than the allowed maximum results in an excess contribution. The IRS imposes a 6% excise tax on this excess amount for each year it remains in your account. This tax is reported on IRS Form 5329.
To avoid this penalty, you must withdraw the excess contribution before you file your federal income tax return for the year the contribution was made, including any extensions. You must also withdraw any net income that the excess funds generated while in the account. Your HSA custodian can help you calculate these earnings and process the corrective distribution.
The withdrawn excess amount is not taxed, but the earnings attributable to it must be reported as “Other Income” on your tax return. If the excess contribution was made by your employer, it should be included as wages on your Form W-2. If it is not, you are still responsible for reporting it as income.