What is a Premium Only Plan (POP)?

Cut the Cost of Payroll Taxes with a Premium Only Plan

A Section 125 Premium Only Plan (POP) lets you cut payroll taxes without cutting your payroll... saving both you and your employees money by reducing payroll taxes. This pre-tax health benefit works by making one simple adjustment in your payroll process. Employees pay their portion of insurance premiums on a pre-tax basis rather than on an after-tax basis.

A Section 125 POP, sometimes called a cafeteria plan, reduces your taxable payroll by reducing your employee's taxable income. So, both you and your employees pay less in taxes. When employees pay for these benefits pre-tax, it allows them to increase their spendable income while giving you substantial FICA tax savings. Implementing a Premium Only Plan could save your company thousands of dollars in payroll taxes a year depending on the size of your company!

Ask PrimePay How Easy it is to Offer Pre-Tax Health Benefits

Let's face it; with the rising cost of providing health care coverage, it's hard not to pass the increase in premiums onto your employees. So why not give your employees a tool to help them manage this increase in cost? With PrimePay's Premium Only Plan, we can help you reduce the amount you pay in payroll taxes and, at the same time, increase your employee's take home pay!

Relieve the Pressure of Rising Health Care Costs

Internal Revenue Code Section 125 allows employees to select certain benefits normally paid on a post-tax basis and pay for them pre-tax instead. With a Section 125 Plan, the contributions an employee makes for insurance premiums for health, dental, disability and group term life insurance programs can be paid for pre-tax. The net result is that the employee saves at least 22% in Federal and FICA taxes.

Let's Calculate Your Employees' Annual Tax Savings

In the example below, we'll show you how offering a pre-tax health benefit to your employees will increase their spendable income while giving you significant FICA savings! In this scenario, an employee would receive an additional $900 annually in their take home page by taking advantage of paying for insurance premiums with pre-tax dollars. As an employer, your annual tax savings would be $275.40 for this one employee!

Contact PrimePay and See How Much You Can Save Annually