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ARTICLE · 07 NOVEMBER 2024

2025 Dollar Limits On Compensation And Benefits

Venable LLP
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The Internal Revenue Service (IRS) has announced 2025 dollar limits on benefits, contributions, and compensation. The Internal Revenue Code (Code) affords tax benefits for employers...

United StatesEmployment and HR
Lisa Tavares
Lisa Tavares
Juliana Reno
Juliana Reno
Harry Atlas
Harry Atlas
John Wilhelm
John Wilhelm
Carol V. Calhoun
Carol V. Calhoun
Ryann M. Aaron
Ryann M. Aaron

The Internal Revenue Service (IRS) has announced 2025 dollar limits on benefits, contributions, and compensation. The Internal Revenue Code (Code) affords tax benefits for employers that sponsor qualified plans and for employees who participate in such plans. In exchange for these tax benefits, the Code places limits on the contribution and benefit amounts. The IRS makes annual cost-of-living adjustments to these limits.

The rate of inflation was lower in 2024 than in 2023, so many limit increases are less than the previous yearly increase.

The key limits for 2025 (and the limits that applied in 2024) are listed in the table below:

Code Section

Limit

2025

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