As an employer, you can save by not having to match FICA taxes - a savings of almost 8%! Over the course of a year, and multiplied by each employee, the savings add up.
| FLEX PLANS SAVE YOU MONEY! | ||||
| Benefit | Number of Participants (A) |
Annual Election (B) |
FICA Rate (C) |
FICA Tax Savings (A x B x C) |
| Medical | 130 | $1,000 | 7.65% | $9,945 |
| Dependent Care | 25 | $3,000 | 7.65% | $5,738 |
| Total Annual FICA Savings | $15,683 | |||
As an employee, you can save money by using "pre-tax" dollars to pay for eligible health and dependent care expenses.
Here’s an example of actual savings when you participate.
The following example illustrates an employee who earns $24,000 annually ($2,000 monthly) and compares the monthly earnings with and without the benefit of a Flexible Spending Account:
| No FSA | With FSA | ||
| Monthly Gross Income | $2,000.00 | $2,000.00 | |
| Flexible Spending Account Contributions | (00.00) | ($500.00) | |
| Taxable Wages | $2000.00 | $1,500.00 | |
| Taxes | Federal 15.00% | $300.00 | $225.00 |
| State 5.00% | 100.00 | 75.00 | |
| FICA 7.65% | 153.00 | 114.75 | |
| Less After-Tax Expenses |
Health Care / Dependent Care |
$500.00 | 00.00 |
| Net Monthly Income | $947.00 | $1,085.25 | |
| Monthly Tax Savings | $138.25 | ||
| Annual Tax Savings | $1,659.00 | ||
Please note: These are estimates only. Your percentage could be higher or lower depending on your tax bracket.
Depending on your tax bracket, estimated tax savings range from 15 to 30% of the dollars you set aside. And, if your company offers a debit card option, using your FSA plan is easier than ever.
To learn what kinds of expenses are covered under an FSA, please click here.
Access our Savings Calculator to help you determine how much money to contribute to your FSA.