Section 125 Cafeteria Plans allow employers to offer eligible benefit plans to their employees on a pre-tax basis, reducing both employer and employee tax liability. Cafeteria plans include Premium-Only Plans (POP) as well as flexible spending account (FSA) for unreimbursed medical (URM) and dependent day care (DDC)
What’s In It For Employers?
- Reduces Social Security (FICA) and Federal Unemployment (FUTA) tax liability.
- Increases employee retention by enhancing their benefits package.
What’s In It For Employees?
- Decreases taxable income, increasing take-home pay.
- Offers flexible payment option when coupled with URM debit card.