FSA Savings Calculator
Enter your planned annual FSA contribution and your tax rates to see how much tax you avoid, what the contribution really costs you, and the impact on each paycheck. Everything runs in your browser — nothing is uploaded or saved.
📖 How it works & FAQA flexible spending account (FSA) lets you set aside money from your paycheck before taxes for eligible health expenses — copays, prescriptions, glasses, dental work, and hundreds of everyday items. Because contributions come out before federal income tax, most state income taxes, and FICA payroll tax, every dollar you put in costs you less than a dollar of take-home pay. This calculator shows how much tax you avoid and what your contribution really costs.
How the math works
Tax saved = contribution × your combined marginal tax rate. The combined rate is your federal bracket plus your state income tax rate plus 7.65% FICA (Social Security and Medicare), since FSA payroll deductions skip all three. Net cost = contribution − tax saved. For example, $2,000 at a 22% federal bracket with 5% state tax and FICA gives a 34.65% combined rate: about $693 in tax saved, so $2,000 of spending power costs you roughly $1,307.
How to use it
- Enter your planned annual FSA contribution — what you expect to actually spend on eligible expenses this year.
- Pick your federal marginal tax bracket, the rate on your last dollar of income.
- Add your state income tax rate, or 0 if your state has no income tax.
- Keep FICA included (the default) unless your plan is an exception.
- Read the results: tax saved, true net cost, combined rate, and the per-paycheck impact. Everything updates as you type, and every assumption is editable.
These are estimates only, not professional, financial, tax, or legal advice — confirm details with your benefits administrator or a tax professional.
FAQ
- How much can I contribute to an FSA?
- The IRS sets the annual health FSA limit — $3,300 for 2025 plan years, adjusted for inflation each year. Dependent care FSAs have a separate limit, typically $5,000 per household.
- What happens if I don't spend it all?
- Most FSAs are use-it-or-lose-it, though many employers offer a grace period or a small carryover (around $660). Only contribute what you are confident you will spend.
- Do FSA contributions really avoid FICA?
- Yes. Unlike a traditional 401(k), FSA contributions are exempt from Social Security and Medicare tax as well as income tax, which is why the savings rate is higher than your income tax bracket alone.
- Which tax rate should I use?
- Your marginal rate — the rate charged on your last dollar earned — not your effective (average) rate. FSA dollars come off the top of your income, so they save tax at the marginal rate.