Unlike HSAs/FSAs, there is no IRS-imposed contribution limit for LSAs because they are not tax-free. Employers can decide how much to budget. Many employers pick an amount that fits their wellness budget or aligns with specific goals. As mentioned, a few hundred dollars per year per employee is common, but some might be more generous if covering big-ticket items (e.g. an employer might offer $5,000 for adoption expenses via an LSA). The absence of a legal cap means it’s entirely up to the company’s discretion.
