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The Flexible Benefits Program allows employees a choice of paying for their share of employer-sponsored health, dental, vision, disability, supplemental insurances and group term life insurance up to $50,000 with pre-tax payments from their pay.
Paying Premiums for Employer-Sponsored Insurances with Pre-Tax Dollars
Employees who are enrolled in their employer-sponsored insurances can have their premiums paid with pre-tax dollars from their pay or with after-tax dollars.
When employees pay for employer-sponsored insurance premiums with after-tax dollars, the employee pays taxes first and then pays for their insurance premiums.
However, when your employees pay for their premiums with pre-tax dollars, the insurance premiums dollars are taken out of their pay
before taxes. Because those dollars go for benefits instead of into their paycheck, the Internal Revenue Service does not consider them part of taxable income. As a result, your employee’s taxable income is less. When taxable income is less, federal and state income taxes will be reduced and that means more take-home pay for your employees! |
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