HSA Savings and Tax Benefit Calculator

What you earn in a year. It is used for one purpose only, to decide how much payroll tax your contribution actually avoids: below the Social Security wage base the whole employee share is saved, and above it only the Medicare part is, because Social Security stops being charged there. It does not affect the limit, the growth or the balance.

Whether the care you spend on each year comes out of the account or out of your pocket. Paying from the account is simpler and the money is never taxed; paying from pocket and keeping the receipts leaves the balance invested and lets it be reimbursed at any time in the future, with no deadline. The difference over a long horizon is the spending compounded at your return, and it is the single largest choice on this sheet after the contribution itself. The account can only ever pay what it holds, so a year it cannot cover in full is reported and the rest of that year comes out of pocket anyway.

The federal income tax rate on your next dollar of income, which is the rate the contribution is taken off at. It is the rate for the bracket your taxable income lands in, not the average rate you pay across all your income, and the two are usually several points apart. It is also the rate charged on money taken out early for something other than care, on top of the additional tax.

How many years to project, counting from now. It is also the grid's downward axis, so the surface at the foot shows the balance at five horizons either side of it. A long horizon is not by itself a plan: contributions have to stop when you enrol in Medicare, and the status line says so when the horizon runs past that age.

Whether the money goes in through your employer's payroll plan or is paid in directly and claimed back on your return. This is the entry that decides whether there is a payroll tax saving at all: through payroll the contribution is not treated as wages, so the employee payroll tax is avoided as well as income tax, while a direct contribution saves income tax only. It is worth several hundred dollars a year on a full contribution.

Optional. Your state income tax rate. Leave it blank if your state charges no income tax, which nine do not, and that is why the default is nothing rather than an average. Two states do not follow the federal treatment of these accounts at all: there a contribution is not deductible and the growth is taxed in the year it is earned, so leave this blank and read the growth as a figure before state tax.

Optional. What your employer puts into the account each year, including anything from a wellness scheme. Leave it blank if your employer puts in nothing, which is the case for about one worker in seven. It matters more than most people expect, because it counts against the SAME limit you do: every dollar your employer contributes is a dollar you may not.

The return you assume the balance earns each year, after any fund charges. It is an assumption you are making rather than a forecast anybody can offer, which is why the grid at the foot prices five returns either side of it. Note that most of these accounts are not invested at all: only about one in ten holds any invested money, and one left in cash earns close to nothing.

Optional. What you expect to spend each year on care the account may be used for. Leave it blank if you are not spending from the account. Entering it changes nothing on its own: it only leaves the balance if you also say that care is paid from the account, and the pairing of the two is the comparison this calculator is built around. The same amount is assumed every year; it does not rise.

What you intend to put in yourself each year, before the limit is applied. If it is more than the limit leaves you, the excess is reported separately and is not added to the account, because money above the limit is not a contribution: it is an excess that has to be taken back out or it is taxed every year it stays in.

Optional. What the account already holds. Leave it blank to see what a new account reaches on its own. It is compounded at the same return as everything else, so on a long horizon an existing balance can be worth more than several years of new contributions, and it is also the first thing the account draws on when care is paid from it.

Your age now, in whole years. Two things hinge on it. From the catch-up age an extra amount may go in each year, and it is a flat statutory figure that has not been raised for inflation. And eligibility ends when you enrol in Medicare, which is why a projection running past that age is flagged rather than quietly extended.

Whether the plan covers you alone or a family. It is the single most important entry here, because it decides the limit: for 2026 the family limit is almost exactly twice the self-only one, and a family plan covering two people who each have their own account is a different arrangement again, since a catch-up belongs to a person rather than to a plan.

Machinery, and NOT an input. The same for the column axis: Excel substitutes into it while filling the grid, and the rest of the time it mirrors Annual_Return.

Machinery. Excel requires the quantity being tabulated to sit in the grid's top-left corner, where it means nothing to a reader, so it is formatted away. It holds Balance_After_Years.

The values across the top of the grid: the return, in steps of one point either side of yours and never below nothing. Read a column to hold the return fixed and vary the horizon. The middle entry is your own return, and a low return makes the floor repeat near the left of this axis, which is the grid running out of room rather than an error.

The first year's saving as a share of what you put in. It is the clearest single measure of what these accounts are worth: it is the sum of your marginal rate, your state rate and whichever payroll rate applies, so it moves when any one of those three does and it is the number to quote when comparing this with another kind of account.

What the first year's contribution saves in state income tax, at the rate you entered. It is nothing in the nine states with no income tax, and it should be left at nothing in the two states that do not follow the federal treatment at all, where the contribution is not deductible.

The values down the left of the grid: the number of years, in steps of two either side of yours and never shorter than one. Read a row to hold the horizon fixed and vary the return. The middle entry is your own horizon.

Everything you and your employer put in across the horizon, with no growth in it. The gap between this and the balance is the growth, and how that gap widens is what the first chart is drawn to show.

Everything the account actually paid for care across the horizon. It is nothing unless you said that care is paid from the account, and it can be less than the care you entered multiplied by the years, because in a year the balance does not stretch to the whole bill the account pays what it holds and you pay the rest. The status line says so when that happens.

The first year's saving repeated for every year of the horizon. It assumes the same contribution at the same rates throughout, so treat it as a scale rather than a projection: a rate change, a coverage change or the catch-up starting all move it.

Machinery, and NOT an input. Excel substitutes each value from the row axis into this cell while it fills the grid; the rest of the time it mirrors Years. Change Years above, never this: the axis is derived from it, so editing the mirror moves the axis while the grid walks and the grid comes out meaningless.

The body of the grid: the balance at the end of the horizon, worked out again for every combination of the two axes, with everything else exactly as entered. One hundred and twenty-one cells, each one the whole calculation run again. It is a component of the grid rather than a result on its own.

What it would cost to take the whole balance out before the Medicare age for something other than care: income tax at your marginal rate plus an additional tax of twenty percent. Twenty is the figure to remember, because it is twice the ten percent people carry over from retirement accounts. After that age the additional tax disappears and the money is simply ordinary income, which is why these accounts are often described as retirement accounts with an extra advantage.

What a year's contribution actually costs you once the tax saved is taken off. It is the figure to compare against what else the same money could do, because putting in a dollar does not cost a dollar.

What the first year's contribution saves in federal income tax: your own contribution at your marginal rate.

The most that may go into the account this year from every source together, which is the published amount for your coverage plus the catch-up if you have reached the age for it. The word together is the part people miss: it is not an employee limit.

What the account holds at the end of the horizon, after every year's growth, every year's contributions and whatever the account was able to pay towards care along the way. It can never be less than nothing, because an account pays only what it holds. It is in today's dollars at a nominal return, so inflation has not been taken off it.

One row for each year of the horizon: the year, everything put in by the end of it, and what the account holds at the end of it. Years the horizon does not reach are blank rather than zero, because a zero would read as a year in which nothing was held. Fifty years are shown; a longer horizon keeps running in the results this table accompanies.

The three layers added together: what one year's contribution is worth to you in tax in the year you make it. Compare it with what you put in rather than with the balance, since it is a saving on this year's tax and not a return on the account.

What you may actually put in yourself, which is the limit less whatever your employer puts in. It is the figure every saving below is computed from, so if it is less than what you entered, the difference is above the limit and is reported on its own line.

What the first year's contribution saves in payroll tax. This is the layer that is usually left out. It exists only when the money goes in through an employer's payroll plan, where the contribution is not counted as wages; it is the whole employee share below the Social Security wage base, and only the Medicare part above it, because Social Security is not charged there.

The part of what you entered that is above the limit once your employer's money is counted. It is not added to the account and no tax saving is claimed on it here. Money actually paid in above the limit is charged an excise tax for every year it stays there, which is not modelled; the remedy is to take it back out before the return is due.

What the account earned: the balance, less what you started with, less everything put in, plus everything it paid for care. Inside one of these accounts it is never taxed at all if it is eventually used for care, which is the part that makes the account unusual; in two states it is taxed each year it is earned, and that is not reflected here.

Reads OK, or explains why the entries are not valid or why the answer deserves a second look.