Section 125 (Cafeteria Plan)
Section 125 of the Internal Revenue Code provides tax savings to employees and employers by allowing employees to have certain items taken out of their paychecks on a pre-tax basis. This reduces the taxable income of the employee, and the payroll tax burden of the employer.
Section 125 provides for a Premium Only Plan. This allows an employee to have deductions for certain insurance premiums, like Medical and Dental, taken pre-tax. Given the rising cost of these premiums, this can amount to a tremendous savings for the employee and employer.
Section 125 also provides for Flexible Spending Accounts. These accounts allow an employee to pay for certain out-of-pocket costs with pre-tax dollars.
All Section 125 options are available to employees through the WorkSmart plan.
Top
