Section 125 – Cafeteria Plan Administration

Employees want to work at companies that offer flexible benefit plans. At Affiliated HR & Payroll, we connect you with the cafeteria plans and administration resources that meet your specific needs.

Get a Hiring Advantage

Help employees save on taxes

Meet Plan Requirements

With plan documentation

Avoid Accidental Discrimination

With non-discrimination testing

Save on Taxes

Employers, too, receive tax savings

Put administration of your cafeteria plan in the hands of the experts

9

Recruit the Best

Attract top talent with competitive benefits packages complete with cafeteria plans.

9

Expert Guidance

Plans are proposed only after an in-depth investigation of your needs.

9

Meet Plan Requirements

Our experts document your plan for you as well as the required plan description.

9

Stay Compliant

We’ll update your plan each year as changes are made to stay compliant with requirements.

9

Measure for Discrimination

Demonstrate that your plan doesn’t discriminate in favor of highly paid or key employees.

9

Save on Taxes

Employers save as much as 7.65% of employee pre-tax contributions.

Competitive Benefits Packages Made Easy

If you want to offer your employees the best of the best in the way of benefits packages, you can’t overlook cafeteria plans.

Section 125 of IRS code allows employees to take advantage of pre-taxed benefits. In other words, plans created by employers under Section 125, or cafeteria plans, enable an employer and employees to pay for group insurance premiums on a before-tax basis. Group insurance premiums allowed in cafeteria plans include medical, dental, vision and group life insurance. In addition, employees can pay for other non-reimbursed health care costs and daycare costs by participating in a Health Care Flexible Spending Account (FSA) and a Day Care Flexible Spending Account (DCFSA).

Cafeteria plans are attractive to your current and potential employees because they can decrease their Federal and State income taxes (if applicable) as well as Social Security and Medicare taxes. Savings could range from 20 – 40% of pre-tax contributions depending on an employee’s actual tax rates.

Cafeteria plans mean tax savings for you, the employer, too. Employer tax savings can be as much as 7.65% of employee pre-tax contributions as a result of decreased taxable Social Security and Medicare wages.

As with anything related to taxes, there are requirements of employers who offer cafeteria plans to employees. Employers must have a written plan document as well as a summary plan description to outline how the plan operates. Lastly, non-discrimination testing must be performed to demonstrate that the plan does not discriminate in favor of highly compensated or key employees.  

Affiliated HR & Payroll provides a full range of services around Section 125 plan administration through a network of partners. 

We can help you with the administration of your plan, from documentation to dissemination, all the way to upkeep.

7 + 12 =

Get Help With Cafeteria Plan Administration

Are you ready to take the next step and offer your employees cafeteria plan benefits? Reach out to our team to get started or to ask all your Section 125 questions.

Client Testimonials

Listen to what other businesses have to say about working with us.

“Teamwork is a key element in construction.  When I decided to start our company, almost 3 years ago, one of my main goals was to surround myself with the right team.  Affiliated HR & Payroll has blended into our team and provides the support that we need to continue bringing in more teammates as we continue to grow.”

Ricardo

President, Commercial Construction Company

"We have been part of the Affiliated HR & Payroll family for more than 10 years. One of the best business decisions I have made was moving from a larger payroll company to Affiliated HR & Payroll. The personal service I receive is above and beyond any ordinary payroll/HR company.  I highly recommend and refer other business to Affiliated HR & Payroll Services!"

Gina

Program Administrator, Medical Practice

“We are grateful to have Affiliated HR & Payroll.  Our expertise is people and the people at Affiliated HR & Payroll understand business. They have educated us, helped us grow, and become a strategic partner. We credit our success to building and maintaining relationships like we have with Affiliated HR & Payroll."

Brandon

Co-Founder, Strategic Human Capital and Business Strategy Company

Recent Articles

Our blog features articles about HR best practices, labor law guidance and other topics to help you manage your workforce.

DOL Issues Clarification on Independent Contractors
DOL Issues Clarification on Independent Contractors

Both companies and those who work for them need to understand the very important differences between being an employee and being an independent contractor. The line can be very thin, but it always exists, and since employees and contractors are treated very...

OSHA’s New COVID-19 Guidance
OSHA’s New COVID-19 Guidance

OSHA’s new guidance is advisory in nature and creates no new legal obligations. However, one of President Biden’s first acts after being sworn in was to sign an Executive Order on Protecting Worker Health and Safety that directs OSHA to increase enforcement of...

Key Practices to Keep the Workplace Safe
Key Practices to Keep the Workplace Safe

In 1970, when Richard Nixon signed the Occupational Safety and Health Act into law, an estimated 14,000 workers were killed on the job every year. Fifty years later, that number is down to 5,333, but safety in the workplace remains a paramount concern, and not only...

From HR and Payroll to Time, Talent, and Benefits, everything we do is designed to save you time and streamline your operations.