One simple adjustment in your company’s payroll process could save your business thousands of dollars!
With Globe Life Liberty National Division’s Section 125 Cafeteria Plan, you can change payroll deduction for employee premium payment from an after-tax to a pretax basis on eligible products.
The chart below shows an example of how Section 125 lowers employees’ taxable income.
Employee Tax Savings
Tax savings are for illustration purposes only. Actual savings vary from employee to employee.
What does this mean for your business?
With lower taxable employee gross income, your business spends less on contributions toward Social Security, workers’ compensation, and unemployment insurance taxes. Each time an employee participates in the Plan, your overall taxable payroll contribution decreases.
The chart below shows an example of estimated annual tax savings based on the number of enrolled employees and monthly premium.
Employer Tax Savings
Average Monthly Redirected
Premiums Per Employee
Example based on combined Social Security (FICA) and federal unemployment (FUTA) taxes of 10%. Additional state and local taxes may apply in some states, which could affect overall tax savings.
In this example of reduced taxable employee income, your company would spend less Social Security and save about $10 for every $100 of employee contributions.