HSA calculator
What a health savings account is worth in tax saved and long-term balance if contributions are invested rather than spent.
Tax saved this year
Estimate$2,769.00
24% income tax plus 7.65% payroll tax on 8,750
- Your contribution limit
- $8,750.00
- Payroll tax saved
- $669.00
- Balance after 20 years
- $358,711
| Contribution | $8,750.00 |
|---|---|
| Income tax saved at 24% | $2,100.00 |
| Payroll tax saved at 7.65% | $669.00 |
| Total tax saved | $2,769.00 |
- The payroll tax saving only applies to contributions made through an employer plan, not to direct deposits claimed on your return.
- Requires enrolment in a qualifying high-deductible health plan for the months contributed.
A family contribution of $8,750 at a 24% marginal rate saves $2,100 of income tax plus $669 of payroll tax when made through payroll.
How this is calculated
How this is calculated
Three tax breaks in one account
Contributions reduce taxable income, growth is untaxed, and qualified medical withdrawals are tax free. Contributed through payroll it also avoids the 7.65% payroll tax — $669 on an $8,750 contribution.
saving = contribution × (marginal rate + payroll rate)The balance has to be invested to grow
Default cash settings are the most common mistake. $8,750 a year for 20 years is about $175,000 in cash against roughly $359,000 at a 7% return.
The account outlives the health plan
Contributions require qualifying cover, but the balance stays yours if you change plans or employers. That is the opposite of a flexible spending arrangement, where the $3,400 limit is use-it-or-lose-it each year.
Worked example: Family cover, $8,750 contributed at a 24% marginal rate
| Contribution | $8,750 |
|---|---|
| Marginal rate | 24% |
| Years | 20 |
| Income tax saved | $2,100 |
|---|---|
| Payroll tax saved | $669 |
| Net cost | $5,981 |
Health-account rules vary widely by country. Pick a country above for the limits and eligibility conditions that apply to you.
What this assumes
- Qualifying health cover for the full year.
- Contributions made through payroll.
- The balance is invested rather than held in cash.
- No account fees.
Where this commonly goes wrong
- Contributions outside payroll usually miss the payroll tax saving even though the income tax deduction still applies.
- Eligibility ends when your health cover changes, and contributions after that point can attract a penalty.
- Default cash settings mean many balances never grow at all despite years of contributions.
Questions
What makes a health savings account different?
Three tax breaks stack: contributions are deductible, growth is untaxed, and qualified medical withdrawals are tax free. Made through payroll it also avoids payroll tax, worth $669 on an $8,750 contribution.
Does the balance expire?
In the US it does not — the balance rolls over indefinitely and is portable across employers. Flexible spending arrangements are the ones with use-it-or-lose-it rules, and the two are frequently confused.
Should the balance be invested?
If current medical costs can come from cash flow, yes. $8,750 a year over 20 years is roughly $359,000 invested at 7% against about $175,000 in a default cash account.
Related tools
Sources
Estimate only, based on published IRS figures for the current period. Not tax or legal advice. Confirm your position with the IRS, a CPA, or an enrolled agent.
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