How to contribute to your HSA
Three ways to fund your HSA — payroll, direct contribution, and rollover — and how to claim the deduction at tax time.
There are three ways to put money into an HSA. Payroll contributions are the most tax-efficient because they also dodge FICA taxes. Direct deposits are flexible. Rollovers from an old HSA or IRA are useful if you're consolidating accounts.
Before you contribute
- Confirm you're enrolled in a qualifying HDHP — that is required to make HSA contributions.
- Confirm you're not covered by any disqualifying insurance (a general-purpose FSA, Medicare, Tricare, or being a tax dependent).
- Know the annual limit. For 2026: $4,400 for self-only HDHP coverage, $8,750 for family. Add $1,000 if you're age 55 or older.
Method 1 — Payroll contribution
- Sign up through your employer
Choose an HSA contribution amount during open enrollment or after a qualifying event. The amount comes out of each paycheck pre-tax.
- Confirm FICA savings
Payroll HSA contributions avoid Social Security and Medicare taxes (FICA) — about 7.65% extra savings vs. a personal contribution. This is the best method if available.
- Adjust during the year as needed
Most employers let you change your HSA contribution monthly. Use this if your tax situation or expected expenses change.
Method 2 — Direct contribution
- Log in to your HSA custodian
From the custodian's website, link a bank account and transfer funds. There's no employer involved.
- Save documentation
Keep records of every contribution. You'll need them for IRS Form 8889 at tax time.
- Deduct on your tax return
Direct contributions are deducted on Schedule 1 of your Form 1040 — but you don't get the FICA savings.
Method 3 — Rollover or transfer
- Initiate a trustee-to-trustee transfer
If you're consolidating from a former employer's HSA, ask your new custodian to handle a direct transfer. Unlimited per year, no taxes.
- Or do a one-time IRA-to-HSA rollover
Once in your lifetime, you can move money from an IRA to an HSA up to the annual contribution limit. The rolled-over amount counts against your HSA limit for the year.
FAQ
- Do employer contributions count against my limit?
Yes. The annual limit is the combined total of your contributions and your employer's. If your employer puts in $1,000, the most you can add (self-only, 2026) is $3,400.
- What if I contribute too much?
You'll owe a 6% excise tax on the excess each year it stays in the account. Withdraw the excess (plus any earnings on it) before your tax filing deadline to avoid the penalty.
- Can I contribute if I'm part-year HDHP-eligible?
Yes, with the 'last-month rule' or 'sum-of-months' calculation. The math depends on whether you stay HDHP-eligible the following year. Use IRS Form 8889 instructions for the right method.