Section 125 Definiton

Payroll Definitions

Browse terms alphabetically

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Section 125 Definiton

Term Definition
A section of the Internal Revenue Code that allows an employer to offer benefits to employees on a pre-tax basis.

Extended Definition
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?

Get Started
Try it free

Sign up today for a free, no-obligation 30-day trial.

Try It Free for 30 Days
Get Started
Take a demo

Kick the tires with a free self-guided demo.

Take a Self-Guided Demo