If you don’t currently offer your employees a Section 125 Plan, have you considered the benefits of starting one?
Generally speaking, a Section 125 Plan allows your employees to withhold an amount from their paycheck that is not subject to the federal income tax, Social Security tax or Medicare tax. Most often, Section 125 Plans are set up for health costs, but some plans are available for childcare expenses or other uses.
What are the typical benefits of a Section 125 Plan?
- Eliminate the employer share of Social Security and Medicare tax on the employees’ withholding in which the employer savings can pay for the cost of the Plan.
- Assist in employee retention.
- Allows an employee to use pre-tax dollars to pay for medical expenses such as insurance deductibles or for procedures typically not covered under most plans (i.e. LASIK eye surgery).
Is a Section 125 Plan right for you? Email Rea & Associates for help.