As we head into 2026, several key payroll and benefits updates are coming that will affect how New York employers manage pay, benefits, and compliance. Whether you run a small business or oversee a growing team, these updates matter — and missing them can get expensive.
At Northwood Payroll & HR, we make sure our clients stay ahead of these changes so payroll runs smoothly, benefits stay compliant, and teams stay focused on growth — not red tape.
Let’s break down what’s new for 2026.
🩺 HSA & FSA Limits for 2026
The IRS has released the new Health Savings Account (HSA) and Flexible Spending Account (FSA) limits for 2026.
| Category | 2025 | 2026 | Change |
|---|---|---|---|
| HSA (Self-Only) | $4,300 | $4,400 | +$100 |
| HSA (Family) | $8,550 | $8,750 | +$200 |
| Catch-Up (Age 55+) | $1,000 | $1,000 | No change |
| Health FSA | $3,300 | $3,400 | +$100 |
HDHP Plan Requirements (for HSA eligibility):
-
Minimum deductible: $1,700 (self) / $3,400 (family)
-
Maximum out-of-pocket: $8,500 (self) / $17,000 (family)
What employers should do:
-
Update 2026 open enrollment materials and payroll deduction setups.
-
Confirm that offered health plans still qualify as HDHPs under the new thresholds.
-
Communicate the increased limits to employees who contribute to HSAs or FSAs.
💰 New York Minimum Wage & Exempt Salary Thresholds
The state’s minimum wage continues to rise as part of the scheduled statewide increases.
| Region | 2025 Rate | 2026 Rate |
|---|---|---|
| NYC, Long Island, Westchester | $16.00/hr | $16.00/hr (no change) |
| Rest of New York State | $15.50/hr | $16.00/hr |
Exempt (Salary) Thresholds for 2026:
| Region | Weekly | Annual Equivalent |
|---|---|---|
| NYC, Long Island, Westchester | $1,275 | $66,300 |
| Rest of New York State | $1,199.10 | $62,353.20 |
Tipped Food Service Workers wage for 2026:
| Region | Rate | Tip Credit |
|---|---|---|
| NYC, Long Island, Westchester | $11.35 | $5.65 |
| Rest of New York State | $10.70 | $5.30 |
What employers should do:
-
Review salaried employees to ensure they meet the new minimum salary test for exempt status.
-
Adjust hourly rates in payroll before January 1, 2026.
-
Communicate changes early to avoid confusion on the first payroll of the year.
💼 Retirement Contribution Limits & Secure Choice
Federal retirement contribution limits are climbing again for 2026, giving employees a chance to save more — and employers more room to offer competitive plans.
| Plan Type | 2025 Limit | 2026 Limit |
|---|---|---|
| 401(k) / 403(b) Elective Deferrals | $23,500 | $24,500 |
| Catch-Up (Age 50+) | $7,500 | $8,000 |
The Secure 2.0 Act Change
Starting January 1, 2026, employees earning over ~$145,000 (indexed) must make catch-up contributions to 401(k)s on a Roth (after-tax) basis.
This change will impact payroll coding and plan administration for high-earners.
New York Secure Choice Savings Program
New York’s long-delayed state-run Roth IRA program is finally rolling out in March 2026.
Employers with 10+ employees who don’t offer a retirement plan will be required to register and auto-enroll their workers.
What employers should do:
-
Confirm 2026 limits with your payroll provider or plan administrator.
-
Verify Roth capability in your 401(k) plan for catch-ups.
-
For employers without a plan — decide whether to enroll in the state program or offer your own.
⚙️ Other Key Payroll Updates
-
IRS Standard Mileage Rate: Expect a modest bump again in 2026 (final numbers released December 2025).
-
Social Security Wage Base: Typically increases by ~$5,000 per year — likely landing near $177,000 for 2026.
-
Federal Unemployment Tax (FUTA): Rate remains 6.0% on the first $7,000 of wages (with potential credits).
-
State Unemployment (SUI): New York rates and wage bases are reviewed annually; 2026 updates will post in December 2025.
🧾 What This Means for Employers
2026 isn’t about massive overhauls — it’s about precision. The increases are incremental but important. Getting them wrong leads to under-withholding, compliance headaches, and tax corrections that waste everyone’s time.
At Northwood Payroll & HR, we’re already updating our payroll and HR systems to reflect these changes automatically on January 1st.
Our clients can relax knowing compliance updates are handled — no manual adjustments, no surprises.
🌲 Rooted in Service. Built for Growth.
These aren’t just numbers — they’re the rules that shape your company’s foundation. Staying compliant means staying focused on what matters most: your people and your business.
If you’re not yet a Northwood Payroll & HR client and want proactive payroll and HR support that actually scales with your business, reach out today.
