This example uses an annual salary of $20,000.

$20,000 Salary Example – $30,000 Salary Example – $40,000 Salary Example

Jack earns $20,000 annually and has out-of-pocket costs for medical office visits and one supply of a generic drug each month. He also plans to purchase new glasses/contacts. These costs total approximately $1500 each year.

Without Health Savings Account

All money spent on healthcare expenses is post-tax.

With Health Savings Account

+$500!

Additional Benefit: HSA money not used is available next year.

Jack has increased his take home pay by $500 per year ($42 monthly) by participating in a Health Savings Account. How is this possible? Jack has decreased his taxable pay while also putting himself in a lower tax bracket. He could potentially have $500 more to spend because he is not paying for his medical expenses with money that has been taxed by the government.