A Cafeteria Plan, also known as a Section 125 plan (the IRS rule section), allows employees to pay for specific benefits on a pre-tax basis. Doing so means that employees have more take home pay, and employers pay less in matching payroll taxes - a true win-win for employees and emplo...
Section 125 plans are a fringe benefit that employers who want to compete for the best talent can use to entice and retain workers. A cafeteria plan, when implemented properly, can boost an employee’s take-home pay without affecting their remuneration. Read on as we take a closer look at ...
A Section 125 cafeteria plan is governed by Section 125 of the Internal Revenue Code and allows employees to pay for certain benefits on a pre-tax basis. These benefits can include health insurance premiums, flexible spending accounts (FSAs) for medical and dependent care expenses, dental and vi...
Any plan governed by this code section is properly called either a Section 125 plan or a cafeteria plan. It is usually best for single employer plans to avoid including a 401(k) plan as part of a cafeteria plan for discrimination-testing reasons.Garner...
What Is A Section 125 Cafeteria Plan?A Section 125 Cafeteria Plan, also known simply as a cafeteria plan or a flexible benefits plan, is a type of employee benefits plan governed by Section 125 of the Internal Revenue Code in the United States. It allows employees to choose from a menu ...
You can define a variety of taxable and nontaxable benefits when establishing a Section 125 Cafeteria Plan for your organization using the Elements task. For the Pretax Deductions primary classification, the following secondary classifications are eligible for section 125 cafeteria plans....
cafeteria plan (redirected fromSection 125 Plans) Medical Financial cafeter′ia plan` n. a fringe-benefit plan under which employees may choose from among various benefits those that best fit their needs up to a specified dollar value.
Common Benefits Under Section 125 Plan The commonly offered benefits under the Cafeteria Plan are as depicted below. However,IRS Publication 15-Boffers full insight into the list of benefits. Example of Section 125 Plan In this example, we shall estimate the amount that will be deducted tax-fre...
A Section 125 Cafeteria Plan is an employer-sponsored benefit plan that allows employees to choose from a menu of taxable and non-taxable benefits. These benefits may include health insurance, dental insurance, vision coverage, flexible spending accounts (FSAs), and other qualified benefits. The te...
A Section 125 premium-only plan (POP) is a cafeteria plan that allows employees to pay their health insurance premiums with tax-free dollars. As the name implies, these premiums are theonlyexpense that the funds can cover. The premiums can be for employer-sponsored insurance plans or individua...