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Pay less in taxes. Pre-tax dollars directed into flexible benefit options are not
subject to Social Security (FICA) or federal unemployement (FUTA) taxes. Consequently, the employer’s
tax bill is reduced.
Offer new benefits at little additional cost to the employer. Flex plans allow
an employer to offer new benefits, such as flexible spending accounts, which provide tax advantages to employees
at little or no cost to the employer.
Maintain a competitive benefit program. Increasingly, today’s employees view flexible benefits
as being more valuable than conventional benefits. Many employers - especially those in highly competitive industries - have
found that flex plans can help them gain an advantage in attracting and retaining valuable employees.
Respond to the varied needs of a diverse work force. In a flex program, employees can
tailor their benefits to fit their own needs.
IRS - Frequently Asked Questions
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