Premium Only Plans (POP)

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Premium Only Plans (POP)

A Premium Only Plan (POP) is one type of Section 125 Plan you may want to consider implementing. Learn more in this small business video minute.

A POP is a pre-tax savings plan that allows employees to contribute to group insurance plans. Contributions of up to $50,000 are allowed. Both you and your employees will save on taxes if you offer a POP.

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Welcome to the SurePayroll minute. I’m Michael Alter.

IRS Section 125 allows you to offer pre-tax savings plans to your employees.One type of plan is called the premium only plan, or POP.

A POP allows employees to contribute to group insurance programs before taxes are deducted from their paychecks.Eligible programs include health, dental and vision insurance, disability insurance and group term life insurance up to $50,000 per policy.

Employees save on social security taxes, federal income taxes and in most cases, state taxes. They reduce their taxable income and increase their take-home pay.

Employees will appreciate the added benefit and your business will save money because you won’t have to pay federal, state or FICA taxes on cash put through the plan.

For the simple answer to small business issues, I’m Michael Alter.

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Premium Only Plans (POP)

Premium Only Plans (POP)

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