Section 125 Definiton
December 5, 2014treehouseadmin
A section of the Internal Revenue Code that allows an employer to offer benefits to employees on a pre-tax basis.
Also known as cafeteria plan or flexible spending plan, a Section 125 plan is a benefits program offered by employers to give employees the option to pay certain expenses from their paychecks prior to the deduction of taxes. Employers withhold a percentage of the pre-tax earnings of employees participating in the program and allocate it to selected expenses. The upper limit for the amounts withheld depends on the plan.
Related Blog Article:
What is a Section 125 Plan?