Flexible Spending Account (FSA) — Payroll Definition

Flexible Spending Account (FSA) paystub meaning: Pre-tax account for medical or dependent care expenses — use it or lose it. Codes: FSA / DCFSA.

Pre-tax account for medical or dependent care expenses — use it or lose it.

An FSA lets you set aside pre-tax dollars for qualified medical expenses (Healthcare FSA) or dependent care (DCFSA). Unlike an HSA, FSA funds generally must be spent within the plan year or you lose them (though many employers offer a $680 carryover or 2.5-month grace period). The 2026 Healthcare FSA limit is $3,400 and the DCFSA limit is $7,500. FSAs reduce your taxable income dollar-for-dollar.

A deduction can be pre-tax, post-tax, voluntary, or required. Its label alone does not establish how it affects taxable wages, so check the plan document, employee election, payroll policy, and year-to-date amount.

When this term appears on a statement, read its label, current amount, year-to-date amount, pay-period context, and any adjacent rate or hours together. Resolve a mismatch with the original issuer or the cited authority rather than changing a record to force a preferred result.