A Cafeteria Plan is a great way to save money on income taxes. 

For employees, it means that the money that is withheld from your paycheck to pay for insurance, prescriptions, day care, etc. is not taxed. There is NO federal/state/local income tax due on these withholdings. Just be sure not to claim these expenses as deductions on your form 1040 also.

For employers, you save FICA matching dollars. There is no Social Security or Medicare matching tax on the salary that your employees redirect into the plan. Employers may also be able to save on unemployment insurance payments since their total gross payroll is reduced.

Find out for yourself! Try our Savings Calculator!