What is a Section 125 Plan? Video |
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Michael Alter - President SurePayroll Time of Video: 1:16      Related Content Getting the Best Healthcare for Your Employees Employee Benefits: 401(k) & Flexible Spending Accounts |
This small business video minute gives you the know-how about Section 125 Plans, and how they can benefit your company. Section 125 Plans give employees benefits by allowing pre-tax deductions for expenses such as healthcare, child care and dependent care. There are several types of plans, including flexible spending accounts, healthcare plan savings accounts, and POPs. A Section 125 Plan can save you money and improve company morale.
Video TranscriptWelcome to the SurePayroll minute. I’m Michael Alter. Section 125 plans were created to give you an incentive to provide your employees with benefits. Under IRS Section 125, employers are allowed to offer employees nontaxable benefits on expenses such as healthcare, dependent care and life insurance. Employees deduct the cost of these items regularly from their gross salary and avoid paying federal, state, or FICA taxes on this deducted income. Section 125 plans benefit your business because you don’t pay employer taxes and Workers' Compensation premiums on these deductions. You also benefits through increased company morale. Everyone’s happy because you’re effectively giving your employees a raise without the cost of the raise being passed on to them or borne by you. There are many types of section 125 plans, including flexible spending accounts, healthcare savings accounts and premium only plans, known as POPs. Careful research will help you choose the plan best for your business. For the simple answer to small business and small business payroll, I’m Michael Alter. |
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