If you’re an employer, you’re always looking for ways to cut costs without reducing employee benefits. A Section 125 plan helps you do exactly that—by lowering payroll taxes while keeping your team’s net take-home pay the same.
On average, companies save $680 per qualified employee per year in
payroll taxes. That adds up fast:
$34,000 in annual savings
$68,000 in annual savings
$170,000 in annual savings
A Section 125 plan is an IRS-approved way for employees to pay for certain benefits pre-tax, reducing their taxable income. This allows employers to pay less in payroll taxes while ensuring employees keep their full take-home pay.
Section 125 is a well-established part of the tax code that has been used by businesses of all sizes for decades.
Employees continue to receive their full compensation while benefiting from tax savings.
The process is seamless, requiring minimal effort from employers. Our team handles setup, payroll integration, and compliance.
We ensure your plan stays fully compliant with IRS regulations and provide continuous support.
Section 125 allows employees to pay for certain benefits pre-tax, reducing their taxable income. Lower taxable income means employers pay less in payroll taxes, including
A Section 125 plan isn’t just about saving on payroll taxes—it also strengthens your business in other critical ways:
Offering valuable benefits at no additional cost helps retain employees and lowers hiring and training expenses.
Employees appreciate better benefits and the ability to save on taxes, leading to a happier and more engaged workforce.
Financially stable and satisfied employees are more focused, engaged, and productive at work.
Employees who receive valuable benefits are more likely to stay with their employer long-term.
Unlike other benefit programs, implementing Section 125 has no direct cost to the employer, making it a win-win solution.
Competitive benefits give your company an edge in hiring top-tier talent in your industry.
Demonstrating that you care about employee well-being strengthens your company’s reputation in the job market.
Maintaining compliance is crucial for any Section 125 plan. Our team ensures your program adheres to all IRS and ERISA guidelines, reducing risk and enhancing peace of mind.
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A multi-location restaurant group with 180 employees implemented Section 125 and saved $122,400 per year in payroll taxes while providing additional benefits to employees.
A mid-sized construction company with 125 employees reduced payroll tax expenses by $85,000 annually, improving their bottom line without reducing salaries.
A healthcare provider with 200 employees was struggling with rising costs. By implementing a Section 125 plan, they saved $136,000 per year, which they reinvested into employee programs.
| Feature | With Section 125 | Without Section 125 |
|---|---|---|
| Employer Payroll Tax Savings | Yes, up to $680 per employee | No savings |
| Employee Net Pay | Stays the same | Stays the same |
| Fully IRS-Compliant | Yes | Yes |
| Hassle-Free Setup | Yes, fully managed | No benefit |
| Reduced Turnover | Yes | No |
| Improved Employee Satisfaction | Yes | No |
| Attraction of Top Talent | Yes | No |
| Strengthened Employee Loyalty | Yes | No |
| Employer Benefit | Saves thousands per year | Pays full payroll tax |
Want to find out how much your company could save?
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